Winners will include people who own businesses that can increase their prices to keep up with inflation even in tough economic times.
A chicken farmer would be one such business. The worse the economy gets, the more people will be eating chickens they cook themselves.
The costs to chicken farmers affect all chicken farmers, for example, if feed prices go up, they all will raise their prices.
Any business that can make sales during a depression would be a good business to own, privately, lock stock and barrel. It can produce an income for the owner that will keep up with inflation. Alternatively, an owner that does not need the salary can allow investment gains on the principal invested to stay in the business (i.e., reinvesting them, perhaps setting up more business locations) to defer tax. Some people during the last depression actually quietly made money.
When central banks print additional money, they are diluting the value of each existing unit that is in circulation. It is embezzling of wealth by dilution similar to when the bartender dilutes the booze.
The author notes that when the Chinese manufacturer takes his dollars to the bank to exchange for Yuan and the Chinese central bank prints the money to make the exchange. This is clearly deliberate dilution of fiat money.
The Federal Reserve (and all other fiat central banks) has been doing this exact thing since the day it started printing money. Worker compensation is directly tied to productivity which increases on average at between 2% and 3% per year. If the central bank did not increase the money supply, over time as the economy grew through improved productivity, each money unit would become valuable. This means that the general level of wages and prices would slowly drop even though this did not mean anyone was getting less poor. In fact, everyone would be getting more wealthy. they would be working fewer hours for the same goods.
There are a lot of participants in the economy who prefer the currency to have a stable value over time. So, as the value of the currency units become more valuable due to increased productivity, this gives the central bank a reason and excuse to create additional money in proportion. This dilutes the value of the currency and gives the appearance of a constant value. What has happened is that for every percent the economy grows, the central bank can expand the money supply in exact parallel and the added money is used by government for its purposes. The beauty of this stealth tax is that nobody sees what government is doing.
The scheme of fiat money, when coupled with an income tax on the changes in values of capital goods like land and securities, is the grandest scheme of theft in all human history. When coupled with deficit spending upon the good credit serviced by all future earnings of all citizens, it operates to also place the entire country in debt serfdom from which escape is forbidden. This is identical to when Pharoah purchased his citizens in exchange for food. We have allowed ourselves to be sold into servitude to government in exchange for “benefits” at our own expense, with our own money, income and assets.
But, happily, we can call for a Convention to revoke the authority of the Leviathan State to continue this outrage. We will do so when we realize the existing Federal Government is more a threat to our liberty and well being then what damage a Convention could produce that would also pass ratification of the surviving states.
Not true. The money you put in the bank is usually then lent out to customer to buy the restaurant equipment, etc., and in a highly leveraged way. The money you spent to buy the gold is also recycled into the economy.
The problem is not that -- the problem is that when the economy contracts, businesses have excess capacity and don't need or want to borrow money from that bank. That's why the velocity is so low.
The gold standard would stabilize our currency. So woudl abolishing the Fed.