In the economic cycle, prices are supposed to go up. At least that is what is being told to us. This is told to us at school. By increasing the prices there is some economic growth and the central banks can say all is going fine.
But is this really the case?
So what is economic growth and why should prices always go up?
Economic growth is nothing more and nothing less than the demand for goods and services by consumers. They purchase those and so we have economic activity.
But we should this mean that prices go up? Why should they increase in wealth cause prices to go up?
When we look at the innovation of new products than we see that they are introduced at high prices. Only early adaptors are buying it.
Slowly on the price is going down and more people will buy it. So why should prices go up?
One of the problems with the methods of measuring economic growth is that you can’t measure economic growth. It is like putting a glass of water together with a house and a loaf of bread. You can’t mix them together.
So what is measured? Well, nothing more and nothing less than the value of a worthless currency. The currencies being used are worthless thanks to the ongoing inflation. This is caused by central banks.
Imagine that if you are living in a single worker household. So 1 person in the house makes the money. A few decades ago you could have a house, feed the children and drive an auto. This is no longer the case.
Does this sound fair to you? NOt to me. So let’s abolish the failing system.