Understanding Price Controls in 7 Easy Steps
Price controls are back on the table. They always are when inflation has done terrible damage to the average household budget.
Kamala Harris and Elizabeth Warren may try to dance away from price controls between now and the election, but if given power, they will use them. They are a congenital part of the leftists’ agenda. The left always works toward government controlling prices. Because that is a most efficient means of controlling people.
Here is everything you need to know about price controls. The whole cycle in seven easy steps.
#1
Politicians spend money they don’t have. They do that to buy votes and to shovel goodies to their donors and other influential cronies.
#2
The treasury, or in our case the central bank, creates new money digitally (just by making bookkeeping entries) or by printing it. It also artificially contrives interest rates to help the state borrow more cheaply and to goose Wall Street and the money center banks.
#3
This made-up (legally counterfeited!) money enters the economy driving prices higher. Wall Street likes it when it inflation drives up stock prices. But consumers don’t like it at all when the cost of everyday living gets out of control.
#4
So the beleaguered consumer screams in pain, demanding that the politicians do something. But the politicians already did do something. They created the inflation in the first place. Never mind that. They rush to help their unhappy constituents…
#5
By introducing price controls. But with the price of the staples of life set below their production cost, producers stop bringing goods to the market. Life begins to resemble Soviet conditions. There are nice, low prices on groceries, but the shelves are empty. You can buy meat from the butcher at bargain prices. But he’s all out.
#6
Consumers are up in arms at the shortages they encounter everywhere. It’s like a wartime economy out there! So the politicians rush to their aid with…
#7
Rationing. Of course, rationing does nothing to increase the amount of goods that are available, which is how prices are really lowered. Goods are still in short supply, but giant bureaucracies and new police powers spring up to support rationing. Black markets, favoritism, cronyism, bribery, influence peddling become the order of the day. Otherwise law-abiding citizens are forced to become law breakers just to survive. Crime becomes rampant. The rule of law becomes a thing of the past – except when it is used to punish dissent and the state’s critics.
And that is the time-tested cycle. It is a cycle that is now playing out in America, a coup de grâce for a once noble, free, and prosperous people. In fact, we are already in the FOURTH step.
As this cycle continues to unfold you will be very glad that you own gold and silver. People in places that have gone through this predictable madness in other parts of the world have found that they could feed their family for a month with one silver coin. Or pay off a mortgage with one gold coin.
Good luck!