One thing you will hear politicians say in their speeches goes along the lines of:
“I will bring inflation under control”
“I will make inflation come down”
“Inflation is transitory”
“I will reduce inflation”
“I will beat inflation”
All of these are misdirection with the exception of the last one because that is an outright lie.
The government cannot “beat inflation” because the government will never stop printing money.
The one thing in life that always goes up is money supply because the government will literally print money out of thin air whenever it wants or needs to. Fiat money is just that – a made up system with no tangible value to support it.
But this article is not about this.
It’s about the misdirection of “reducing inflation”.
Most people’s understanding of reducing inflation is incorrect. They think reducing inflation means prices coming down.
In reality, it actually means prices continue to rise but at a slower pace. It does NOT mean prices come down.
For example, if something costs $100 and the rate of inflation is 10%. Then the next year, the price for that thing will be $110.
Now, if inflation “reduces” from 10% to 8%, the price for the thing a year after that will be $118.8 ($110 * 1.08). The price increases not reduces.
Inflation is the rate of increase in prices.
Even if the rate is lower, the prices of things still go up. Just at a lower pace.
If you want prices to go down, what you want is deflation.
Even if this might be easy to understand for you (LMM readers are at least above average IQ otherwise you’d be watching TikTok not reading this wall of text), most of humanity doesn’t get this.
When they hear “inflation is transitory/temporary”, they think prices will eventually come down.
That’s why they are always complaining about prices rising while also voting for policies that bring more money printing and inflation.
If you are finding yourself squeezed for money as prices rise, realize the important fact: Prices will NOT stop rising.
You can either live extremely frugally (which in my opinion is not a great life) or you can find a way to increase your income.
Personally I much prefer the latter (even though you should manage lifestyle inflation) because there’s a limit to how much you can cut costs but no limit to how much you can make.
Pick any online business and work on it for a few years and it will set you free.
Even if you fail the first few times, the things you learn will help you in the next one (also known as falling forward).
If you think you can just focus on your wage slave job and “wait for prices to come down”, you are like the base public – delusional, ignorant, and stupid.
You have been warned.
– Harsh Strongman
