How Bad Is Inflation? You Won’t Like the Answer…
From Brandon Smith
Historically speaking, inflation or stagflation have always been disastrous affairs. One is hard pressed to find any legitimate examples of a country that experienced an aggressive inflationary episode that came out better for it. A rare scenario would be one in which a nation inflates to fund a war that they then win, but usually negative consequences still happen later down the road.
The problem is that the effects of inflation can be subtle and far reaching, quietly creeping up on a population until suddenly there’s a tidal wave of societal crises. In the U.S. (and much of the western world) we are already witnessing elements of inflationary disaster; there’s a good reason why around 60% of Americans now have a pessimistic view of the future. A majority of people say life is worse for them today than it was in the past.
These kinds of dark sentiments usually coincide with inflationary or deflationary pressures. Inflation in particular can be devastating because it represents an ever expanding hidden tax on the life of each citizen. Not only that, but the cure is often worse than the disease, with central banks instituting interest rate hikes that continue longer than most people expect, which eventually lead to an engineered deflationary kick in the gut for the economy. For a time, prices will remain high on an array of necessities while wages stagnate, consumer demand shrinks and businesses go bankrupt as borrowing becomes impossible.
A system might be able to absorb this shock as long as it is not burdened with immense debt. In the case of the U.S., we are heavily burdened with over $33 trillion in national debt (officially) and over $17 trillion in consumer debt. The damage from stagflation and the Federal Reserve’s inevitable response will make matters worse.
So what should we expect?
More labor strikes
Labor strikes tend to occur in inflationary environments because, at least initially, demand for labor is high, giving labor more leverage against businesses. When people know they can easily jump into another job tomorrow the temptation is to leave their current job at the drop of a hat today.
Strikes were a common crisis in Weimar, Germany and Yugoslavia among others, in some cases because of legitimate concerns and in other cases because of communist provocateurs. The stagflation of the 1970s led to what is known as the “decade of strikes” in the U.S., with labor seeking higher wages to offset rising prices. The strikes sometimes lead to higher wages, which then in turn only lead to even higher prices as production shrinks and the costs are transferred to the consumer.
Wages are stagnant in the U.S., even after the minimum wage unofficially doubled due to labor shortages. Labor demand is high (for now), but the difference in our era compared to previous inflation events is that the vast majority of labor is focused into superfluous markets. It’s not as if manufacturing is a major component of the U.S. economy anymore. Rather, most employment is in the service sector.
No one really cares if McDonalds workers or Walmart workers or Hollywood writers go on strike. This does little to affect their daily lives. What it does do, though, is wear down the business sector over time until a portion of employers eventually downsize operations. If you have enough strikes and businesses can’t find workers in certain regions, they will close up shop and cut their losses. There were multiple incentives for major manufacturers to leave the U.S. for places like China in the 1970s and 1980s, but the constant union strikes during that period played a large part in the decision.
Today, you will have retail and food deserts; places where no businesses will dare set down roots because they can’t keep their stores staffed. In the end, the jobs disappear entirely.
Rising crime and government lies
Speaking of retail deserts, spiking crime rates are another factor that drives employers away from certain neighborhoods and cities.
Obviously this is a situation we are seeing play out in the past couple of years, but the interesting thing is the level of disinformation and denial that public officials have displayed in response. There has been a conspiracy among certain leftist state and local governments and the corporate media to dismiss or hide the rising crime problem in the U.S. The most important aspect of this has been the bizarre overhaul in the way U.S. cities report crime stats to the FBI and to the public.
It’s just a coincidence I’m sure, but starting around the beginning of the Covid pandemic there was a shift in procedures for criminal data reporting within the federal government. That change has allowed a number of cities to withhold crime stats until the new system is finished; this means that some cities will not be reporting reliable stats until 2024-2025.
So, when a leftist journalist says “Gee, conservatives keep complaining about rising crime in San Francisco, but crime is actually going down…” this is a lie. Cities like San Francisco are simply not required to provide full criminal reports for another year.
The crime rate is not only a symptom of high prices. That is a part of it, but the atmosphere of chaos that surrounds inflation also acts as a kind of signal to the mentally unstable and morally corrupt. Bad people will slither out of the woodwork because they view the instability as good cover for their criminal activities. With enough crime overwhelming police, a larger percentage of miscreants are likely to escape scrutiny.
More looting
Again, this is happening right now, but it is generally limited to short bursts in compact urban settings. As inflationary heat boils over, looting will become a daily occurrence and it will move away from retail areas into residential areas.
The fascinating thing about looting is that if you have one man stealing from a store, he is considered a criminal. If you have a group of people stealing from a store, suddenly they become “activists” that are fulfilling their “right to reparations.” There is a political weaponization of looters in the midst of inflation.
The looters are not looting because prices are higher and they need the resources, they are looting because inflation gives them an excuse to loot and political elements are encouraging them to do so.
Population migrations
Inflationary effects can move awkwardly through an economy, with some places far more damaged than others depending on how local governments respond. The worst governments will react with higher taxes in order to offset falling revenues in other areas. They will also reduce public services in order to save money, and this includes reductions in police even in the face of higher crime.
As people realize they are living in a dead zone that is draining their bank accounts dry, they will try to leave if they can. In the U.S., people have migrated by the millions away from blue states in the past few years, but this was more to do with them escaping Covid mandates and lockdowns than escaping economic malaise. The next wave of migrations will happen because of financial decline and the crime that comes with it.
This happens during most economic crisis events. It was common during the Great Depression to see Americans moving around like nomads to places they thought had more work and more prosperity – just like in John Steinbeck’s novel The Grapes of Wrath. Men left their families for jobs across the country so they could send money back home. The homeless spread out from urban areas into the countryside to beg for work or food from farmers.
During inflation, the cost of relocation can be debilitating. There will come a point when moving will be impossible. Until then there will be a swell of populations flowing like water from one place to the next seeking relief from the storm. Expect to see nomadic cultures return to the U.S. with RV caravans, tiny home meccas, tent cities and Hoovervilles (called “Bidenvilles” this time, perhaps).
Balkanization
In the former Yugoslavia, economic disaster accelerated existing social and political divisions to the point of national breakup. “Balkanization” is the fragmentation of a nation into smaller, mutually-hostile (or at least uncooperative) regions.
These kinds of conditions might be a way down the road for the U.S., or, they might be a lot closer than you think. In our case, the divisions will be between the people that want to continue going down the path that is taking us to oblivion, and the people who want to stop and reverse course.
It might seem like insanity, but a large part of the American populace still thinks the direction we are going is necessary and beneficial. They think the destruction of western culture is part of the greater good, that economic calamity is a means to an end and that they will be largely unaffected. There are also people who are just plain stupid and don’t realize that they’re supporting policies which will end up making their lives significantly worse.
Inflation creates chaos, but it can also bring clarity. That which is truly important moves to the forefront of the public mind. The decadent and the vile can no longer hide, but float to the surface like so much putrid ocean froth. People figure out quickly what they can live with and what they’d rather live without. Take steps now to prepare yourself and your family from the chaos ahead. Make certain you have untrackable, uninflatable and totally anonymous stores of wealth (necessities like food and water for survival, barter goods for trade and physical gold and silver for everything else). When you depend others for your very necessities, you’re at their mercy. They have you right where they want you.
Entire subcultures will form and separate to survive and thrive while other groups will try to stop them. Conflict is probably inevitable (as it was in Yugoslavia) but the point remains: Inflationary crisis has the ability to change almost everything.
This is no longer about prices – it’s about survival.
