Posted on 07/05/2016 4:36:48 PM PDT by vannrox
The consistent theme from my travels so far in Europe the UK, Scandinavia, Lithuania has been noticeably higher prices. Shockingly so, in some instances.
London, where I spent a rather pleasant and rare sunny weekend with friends and colleagues, has gone from being stupid pricey, to just plain absurd. Tube prices, taxi fares, food prices, restaurant bills, train fares it all keeps going up.
And to cap it all off, the British governments VAT increases have ensured that absolutely everyone is paying a little bit more.
Here in Lithuania, the buzz around town is the spiraling gasoline prices, which have shot past $7/gallon in local currency. The bootleg fuel industry is thriving here as smugglers bring in cheaper fuel from neighboring Belarus and sell it at a 30% discount.
Needless to say, such practices are heavily frowned upon by the local government looking to get its fair share. Fuel smuggling operations now involve such an intricate network of audacious deception and bribery, it ranks up there with the tall tales of Americas famed Prohibition-era bootleggers.
Now, the official story for rising prices across Europe usually involves some insipid excuse about tensions with Iran or weather. And in nearly every instance, the government propaganda machines simply insult peoples intelligence and understate inflation by an entire order of magnitude.
Yet as John Maynard Keynes, the high priest of modern monetarism, once said, There is no subtler, surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
Prescient words from the man whose General Theory constitutes the playbook from which modern politicians and central bankers routinely pillage the livelihoods of billions of people across the planet.
Currency debasement, though, has a long and distinguished history.
In his 1958 work State and Currency in the Roman Empire to 300 A.D., Sture Bolin outlines the systematic (and almost constant) debasement of the silver denarius coin of ancient Rome, which I have reproduced below:
Subsequent emperors became even more clever at debasing the currency; Caracalla (reign 211-217 AD) created a new coin, the Antoninianus, which had a face value far greater than its weight and metal content.
Under Gallienus (reign 260-268 AD), the Antoninianus was composed of less than 5% silver. By the time of Aurelian in 270 AD, further debasement was essentially impossible though they kept trying.
Such debasement led to rampant inflation in the empire. A slave under the reign of Commodus that cost 500 denarii was five times as expensive under Septimius Severus. A second century modius of wheat (about 1/4 bushel) sold for 1/2 denarius. By the time of Diocletians price fixing in 301 AD, the nominal price was 200 times more expensive.
In Roman Egypt, where the best documentation on pricing has survived, a measure of wheat which sold for 200 drachmae in 276 AD increased to more than 2,000,000 drachmae in 334 AD, roughly 1,000,000% inflation in a span of 58-years.
In his 1960 work Roman Coins, historian Harold Mattingly remarked about Roman inflation that [t]he Empire had, in all but words, declared itself bankrupt and thrown the burden of its insolvency on the citizens.
Other historical examples abound, but Mattinglys assessment sums it up the best. Any government that resorts to debasing the currency is making a conscious decision to stick the people with the consequences of its insolvency.
In the starkest example of modern times, the United States government is insolvent to the tune of tens of trillions of dollars and hemorrhaging cash on a daily basis.
Meanwhile, the US dollar has lost 95% of its value while under the management of the Federal Reserve since 1913.
Today, the Feds balance sheet has expanded to nearly $3 trillion of shaky, questionable assets while posting a mere $55 billion in capital, roughly 1.8%. This is about the same level to which Lehman Brothers was leveraged before its own spectacular collapse in 2008.
Yes, theres a reason the fuel smuggling business is thriving in Lithuania and prices in London have become absurd. Like the Roman Emperors of the past, todays political elite is throwing the burden of its insolvency onto the people.
George Soros is probably making money off it...........................
How?
Gas has always been pricier in Europe. My impression is that the gap isn’t as big with US prices as it was say 30 years ago.
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