You know, my brain's wheels are turning right now with a thought:
"Is an inflationary money policy the driver behind the desire to endlessly consume?"
Yes.
Our financial system depends on perpetual growth. Since all money is debt-based, we are always creating more of it to service the interest from having borrowed it into existence. If all debts were to be paid off simultaneously, there wouldn't be enough money in the world to actually do it. So we keep creating more. This is monetary inflation, which eventually leads to price inflation
unless you monetize more goods, meaning you make more things available for purchase for the newly created money, thereby balancing out supply & demand and preventing price inflation.
We are being driven towards endless consumption in order to perpetuate the status quo. We are always to be two missed paychecks from destitution so we will latch onto any false form of material happiness marketed towards our fears and frustrations.
Remember this the next time some smug douchebag pulls the "muh EnErGy cOnSumpTIon" card against Bitcoin. Deflationary crypto may yet be the biggest boon for the environment. It turns people from consumers into hodlers.
I agree. But if you look at the FRED M2 money velocity chart I posted, you can see that up to 1997, monetary expansion policy actually seemed to buoy the economy even in the face of falling wages (adjusted for inflation, of course.) They decided to make personal credit cheaper and cheaper to fill in the wage gap, so that Average Joes would continue spending into the real economy despite their slowing wage growth and growing personal debt load.
And so continuing to expand the money supply and cheaper credit worked for a while. Until 1997. And then it didn't anymore. You can also see on the chart where consumer spending fell completely off the cliff.
We are now at a point where wages are no longer increasing (to keep up with *real* inflation), mom and pop cannot take on any more personal debt to fill the gap, and thus all consumer spending has fallen to a minimum life support level.
What the Fed doesn't seem to grasp is, all the free stimmy checks or even UBI in the world won't make a lasting turn in consumer spending. Stimmies are just a temporary bump. Only wages going back up relative to *real* inflation will do that. And that just ain't gonna happen.
What the Fed is doing now (sending money directly to consumers) smacks of desperation. It's a joke.
