Let's start with simplified monetary theory. If we all have $10 dollars each, while gasoline is $1 per gallon, and our money is doubled to $20 each, all other things being equal, the price of gasoline can be expected to double to $2 per gallon.
The Federal Reserve printed trillions of dollars in a massive theft scam for billionaires and corporations. Prices rose and will continue to rise, but you and I didn't get the money. They did.
Below is a chart of what is called M1. It's one way to measure how much money exists in the United States. See that massive spike of M1 in 2020 around COVID? That's Trillions of dollars.
Now there's a catch to this. The Federal Reserve tried to hide what they did. Let me explain it.
They tried to make it seem like this huge spike in M1 was due to an accounting change in reporting M1. While we were focused on COVID, the Federal Reserve changed the way they reported M1 in May 2020. Very convenient, right after they started moving trillions. I'll get to that.
The Federal Reserve added another component to M1. In plain English, if M1 was A + B + C before May 2020, M1 was A + B + C + D after May 2020. They want us to think that the huge spike in M1 is due to them adding D to the M1 measure, but it isn't. D is part of it, sure, but A, B and C would have spiked anyway. Here's the technical explanation on how the Federal Reserve changed their accounting right after they started their theft program.
FRED. Before May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions.
Beginning May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other liquid deposits (beginning May 2020), each seasonally adjusted separately.
OK. So what did they do? How did they "steal" any money? They started writing hot checks for Trillions of dollars to their cronies, that's how. On March 12, 2020, the Federal Reserve saw COVID as a good excuse and a good distraction to begin a massive theft program from the citizens of the United States- $2 Trillion worth.
The way they describe it, they're supporting markets by writing hot checks from the US Treasury. This is supposed to help us somehow. Bottom line, they moved $2 Trillion from the Treasury to wherever it went. And it looks like it ultimately went to "repurchase" holdings of billionaires. I'll get to that.
Here's where they didn't hide it too well: the Federal budget Surplus or Deficit. There it is, 2,000 billion dollars, or 2 trillion, plain as day.
So where did it go? Who got the M1 gift from the Federal Reserve?
Here it is: "U.S. billionaires have seen their wealth surge $1.8 trillion during the pandemic, their collective fortune skyrocketing by nearly two-thirds (62 percent) from just short of $3 trillion at the start of the COVID crisis on March 18, 2020, to $4.8 trillion on August 17, 2021."
I mean just look at the percentage of growth of the billionaires wealth during the Pandemic. I know consumption patterns changed a bit during the Pandemic to online retailers, but the only way to explain the huge increases in the wealth of billionaires across the board is from the Fed theft scam.
Their percentage of wealth is spiking.
If you average the 1% in with the 99%, the average person is doing better too. They want us to think we're doing better. It only looks that way if you include the likes of Elon Musk's income. The graph below is real median income, adjusted for inflation. But the statistical measure "average" is deceptive here.
Real Mean Income, if it was available, would show the income level of the person that was in the middle of the income range. 50% would make more and 50% would make less than this person. This person probably isn't doing well. It's a very common statistic, very useful for data like this. The Federal Reserve does not report that statistic. I wonder why.
So using my first example where we all had $10 and gas was $1, we still have $10, and they have $2 Trillion plus ten dollars. Prices adjust way higher higher. We don't have any more money. It is a theft of wealth from the middle class any way that you want to look at it. This is not free market economics. It's theft. It's destroying the middle class.
Charles Wright
P.S. April 2:
I saw on Twitter today where someone tweeted Milton Friedman speaking about inflation. I remember reading Milton Friedman’s book in undegraduate college around 1990. “There’s no such thing as a free lunch.” Someone said he was a “genius.” I replied that common sense appears to be genius when no one else has it. I bet Friedman would agree. Those Trillions came from somewhere. Us. Friedman said, of the ones falsely blamed for inflation at the time: “They don’t produce inflation for one simple reason. They do not own a printing press.”