Tag Archives: Paul Krugman

Inflation: An Abomination unto the Lord

A false balance is an abomination to the LORD,
but a just weight is his delight.(Proverbs 11:1 ESV)

In ancient times, exchange was done through precious metals. You’d have a standard weight against which you would measure these metals for trade purposes. Using a heavier than standard weight when purchasing or a lighter weight when selling would allow you to dishonestly cheat a man out of his wealth, making yourself an extra profit.

These days, we will occasionally discuss usury (student loan debt slavery is a common topic in our sphere), but honest weights and measures are talked of less. What’s there to talk about? We no longer use precious metals for exchange,* so what measures are there to be dishonest about?

Unlike our ancestors, where dishonest weights were the domain of dishonest merchants and criminals, our dishonest weights are a fundamental part of our economic system. We have far surpassed the sin of previous generations in this regards and have made it an ideological mission to rob honest men of wealth through dishonest weights, yet almost no one in the Church speaks against this sinful robbery, this abomination to the Lord.

You shall not have in your bag two kinds of weights, a large and a small. You shall not have in your house two kinds of measures, a large and a small. A full and fair weight you shall have, a full and fair measure you shall have, that your days may be long in the land that the LORD your God is giving you. For all who do such things, all who act dishonestly, are an abomination to the LORD your God.(Deuteronomy 25:13-16 ESV)

To explain how our system uses dishonest weights and measures, I must first explain the banking system, as the system is designed to make this theft as hard to detect as possible.

Since the end of the Bretton Woods system, the US and most other nations have had a floating exchange rate** where the value of money is determined by foreign exchange markets (forex). Supply and demand on forex can be complex, but, for our purposes, what we need to know is that, generally, as the supply of a particular currency increases (relative to the goods and services the economy it backs produces) the value of the currency decreases. This causes the nominal prices of goods to rise and is called inflation. Likewise, as the supply of a particular currency decreases (relative to the goods and services the economy it backs produces), the value of the currency increases. This causes the nominal prices of goods to fall and is called deflation.

Most countries have a central bank which controls the money supply. In the US, this central bank is called the Federal Reserve. It is supposedly not “owned”, but the private banks which are members of the reserve system each own stock in the Federal Reserve and the Fed is required them to pay a 6% return annually, despite it being “non-profit”.

This is not relevant to my current point, but I I want To make sure you didn’t miss this, so I’ll highlight it again: the Federal Reserve, the quasi-public institution responible for the US’ money-supply, is “not-owned” by private banks and is required, by law, to pay these private banks a 6% (“non-profit”) return each year.

Continuing on, in fractional reserve banking systems, used by every country on earth, the banks get money in two ways: the first by borrowing from the central bank or from deposits. The banks make profit by loaning this money out to others and charging interest greater than the interest they pay the central bank or depositers.

Your normal individual or business deposits money into a bank, at which point the money become the bank’s property, while the depositer receives a deposit account. (Yes, this means you do not actually own the money you have deposited with the bank; the money is actually considered a loan to the bank; a loan which you pay fees to the bank to give them). The bank is only required to keep a fraction of the deposit (loan) in reserve; the majority of the deposit (loan) the bank lends to others at a higher interest rate than the depositer charges the bank.

Despite the deposit being more akin to a loan than a trust, the deposit is still considered money. So the bank’s loan to a customer becomes new money created out of nothing. So, this new loan adds new money to the money supply.

Also, the bank can borrow from the central bank. When it does so, the central bank simply creates new money to lend to the banks, increasing the money supply. The case of the US is unique, in that while the Fed makes the loans, the Treasury actually creates new currency. The bank then lends the money it borrowed from the central bank for a low interest rate to others for a higher interest rate (typically 3% points higher).

Just so you don’t miss this part, I’ll highlight it again: the banks borrow off the Fed and the Treasury (ie. off of you) and then charges you 3% extra interest to loan it back to you. Do you realize yet why banks have such ridiculously high profits? And we aren’t even to the outright thievery yet.

These two ways are how a fractional banking system creates new money.

Unequal weights and unequal measures
are both alike an abomination to the LORD. (Proverbs 20:10 ESV)

I need to point out one more fact: money that has been inflated is worth less than money that hasn’t. That is tautological, so I won’t go into it further, but it is essential to understanding.

The banks rob normal people through dishonest weights and measures in two ways, both lending and borrowing.

First, lending.

When the Treasury creates money and the Feds loan it out, the banks get it first. Individuals and businesses don’t borrow from the Fed, only banks and the government do. When the banks create money using fractional reserve banking, they obviously get the money first.

What this means is that the banks get the (less valuable) inflated currency to loan out into an economy with nominal prices based on (more valuable) non-inflated money. They are loaning out less valuable currency as if it were more valuable. They are loaning you a shaved gold coin as if it were a non-shaved coin.

Because the banks and the government always get the inflated money first and loan it as if it were non-inflated money, they always reap the value difference between inflation and non-inflation as pure profit.

Second, borrowing.

When the bank borrows money from depositers, (ie. when you make a bank deposit), the depositers are lending them non-inflated money. When the depositers withdraw their loan to the bank (ie. you use your debit card or an ATM), they are spending inflated money. The bank gets the difference between the non-inflated and inflated money as pure profit. They are taking gold coins from you and returning them to you shaved.

Given that the interest rates on even “high interest” savings accounts are usually less than inflation rates (0.87% < 2%) most depositers are literally paying the banks to hold their money (and that’s not even including account fees).

Every investment anybody makes is losing money this way. Investors invest in non-inflated money and receive returns in inflated money, and all the excess value siphoned off through inflation is pure, staight profit for the banks and the government.

You could accurately replace ‘inflation’ with ‘money the government and banks steal from me and everybody else’. A 2.5% inflation rate means the government and banks collectively and literally stole 2.5% of all the wealth in the country.

These dishonest weights and measures, this theft, this abomination is not only built into our economy, it is the very basis of our economic system.


You shall do no wrong in judgment, in measures of length or weight or quantity. You shall have just balances, just weights, a just ephah, and a just hin: I am the LORD your God, who brought you out of the land of Egypt. (Leviticus 19:35-36 ESV)

In mainstream economics, slow, “stable” inflation (usually in the 1-4% range) is considered desirable, a necessary evil. Keynesians such as Krugman place particular emphasis on maintaining “moderate” levels of inflation (because 1% just isn’t enough).

Here Krugman argues that the average person saving money because it is profitable to do so is wrong, it is a “liquidity trap”. He purposefully and knowningly advocates increasing inflation so more of your wealth is stolen so you will go spend it instead of being robbed.

To the keynesian, this theft is is good, it is praiseworthy. Keynesians are decidedly and purposefully ideologically evil; they know these weights and measures are dishonest and are used to rob you and the average man so that the banks can make a greater profit. They know this, yet they advocate this dishonesty and even mild dishonesty is not enough, they want more.

Is it any wonder keynesians became dominant when their ideology just happens to enrich the banks and government at the expense of the common man.


If he fathers a son who is violent, a shedder of blood, who does any of these things (though he himself did none of these things), who even eats upon the mountains, defiles his neighbor’s wife, oppresses the poor and needy, commits robbery, does not restore the pledge, lifts up his eyes to the idols, commits abomination, lends at interest, and takes profit; shall he then live? He shall not live. He has done all these abominations; he shall surely die; his blood shall be upon himself. (Ezekiel 18:10-13 ESV)

Know this, the socialist fractional reserve, central bank economic system we have is evil. It is detestable, an abomination. It robs the poor to enrich the bankers and the government.

Those lackeys of the banks and government know this and yet they rob you anyway.

Every Christian, every man of any morality, should be fighting the banks, the Fed, the government, and the keynesians. They are evil, they are thieves, and they purposefully robbing and oppressing the average man.

Eventually, hopefully, there inequities will come to light and justice can be enacted.


* I am not going to get into the problems of fiat currency here, it is related, but not what I am going to focus on.

** While I leans towards the gold standard, a floating exchange rate on a free market is not, in itself, a dishonest measure. I would support a free, open-market of currency, where any individual or organization could adopt or offer their own competitive form of exchange. Also, even though I would be against it, I do not think a reserve currency monopoly where currency levels are kept stable and new currency released at a set, predefined rate would be dishonest.

The Bookshelf: What is Seen and What is Unseen

What is Seen and What is Unseen is a part of both the Free Man’s Reading List and the Dark Enlightenment Reading List. It was written in the early 1800s by a Frenchman, Frederic Bastiat.

The writing is solid and moderately engaging, but nothing spectacular.

It’s a rather short book at less than 50 pages, but it gets its main point, that government spending and government debt have unseen negative consequences and you should be aware of unintended consequences when making policy, quite well. Essentially, it is a debunking on Keynesian BS from over a century before Keynesian BS existed. While reading the book, I couldn’t help like feeling Bastiat was intellectually bitch-slapping Paul Krugman from beyond the grave.

Given the age of the book, most of the arguments are well known on the right or among those with some economic knowledge, so if you’re knoweldgable about economics you might already know most of these arguments, such as the broken window parable, for which the book is known. To simplify the parable, a broken window does not lead to economic gains, as the person spending money to replace the window may be employing the glazier, but the tailor/printer is losing out as her is not buying a new book or new clothes.

But even if you know most of it, the most fascinating thing about this book is how little has changed in two hundred years. How can you not read this and think of the intellectual whores like Krugman:

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it…

Or this, and think of every idiot socialist:

Our adversaries consider, that an activity which is neither aided by supplies, nor regulated by Government, is an activity destroyed. We think just the contrary. Their faith is in the legislator, not in mankind; ours is in mankind, not in the legislator.

Or this and think of the Fed:

Whatever may be the amount of cash and of paper which is in circulation, the whole of the borrowers cannot receive more ploughs, houses, tools, and supplies of raw material, than the lenders altogether can furnish; for we must take care not to forget, that every borrower supposes a lender, and that what is once borrowed implies a loan.

Anyway, the greatest thing about this book is seeing how retarded economic ideas parroted by  the ignorant and blind were intellectually destroyed two centuries ago by an economist most people have enver even heard of. Then you feel somewhat sad that mentally enfeebled will still gain traction with their debunked arguments.


I would strongly recommend reading What is Seen and What is Unseen. It’s a short, quick guide to basic economic reasoning that demolishes Keynesian arguments.

The only reason not to read this book, is if you are reading another Austrian economics book that is more in-depth. For example, I have started reading Hazlitt’s Economics in One Lesson, and most of the subject matter of What is Seen and What is Unseen has been covered in the first few chapters of Hazlitt’s book.

But even then, the enjoyment of watching modern idiots being thrashed by some unknown Frenchman 150 years dead may make it worth your while.

Note: I am now moving onto Boston’s Gun Bible and Hazlitt’s Economics in One Lesson, if anyone is trying to read along with me.

Lightning Round – 2012/09/19

SSM comments on the search for the male unicorn. Also, comment of the week.

Elihu studies sex and the Bible. He then tries  attempts to rationalize fornication, but Pode thoroughly rebuts in the comments.
Related: SSM thoroughly studies the matter.
Related: Roissy discovers that abstinence leads to marital happiness.
Related: MGTOW and the Bible.
Related: Another classic MGTOW article. (Link for closed blog).

The psychology of the nanny state.

The insanity of the those dependent on the state.

Bill writes on envy.

Rather than be envious, learn how to succeed.

The failings of conservatives.

University: Sheer nonsense.

A rare moment of truth.
Related: It’s offensive to point out the truth.
Related: It sure is.
Related: 1/16 people is on disability.

The federal debt is designed to keep you in chains.

The finances of a dying superpower.
Related: The foreign policy of a dying superpower. Related.

No one is safe from family court.

The mortgage cops can come for you as well.

Even letting your kids play outside can lead to being jailed.

Krugman’s a jackass.

Speaking of poor economics, the poor are not as poor as assumed.

Most food allergies are fake. Surprising.

Greenpeace should be tried for crimes against humanity.
Related: That’s a nice pic.

Don’t trust “experts“.

(H/T: Maggie’s Farm, the Captain, Instapundit, SDA, Vox)

Lightning Round – 2012/05/22

Remember, your superiors know better than you how to raise your children. (In this case, your superiors are the least competent of those our college system has pumped out).

Government theft can sometimes be more blatant than usual.

The government also hates it when you deprive them of their theft.

Never forget that Paul Krugman, while intelligent, is a complete idiot. From 2002, “Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.” And people still listen to him.

Greens have just as much disdain for life as the reds did.

Steyn writes a great article about Geert Wilders. Read it.

CDMN has an interesting conversation with Christian marriage counselors hamster. Spin once and spin again.

(h/t SDA)