By: Kavarna Hayek
Deflation is good for the consumer and inflation is bad. I hope we can all agree on that. And the reason for it is simple – with inflation, we get fewer goods and services per unit of money in a given period of time than in previous periods. This is due to too much (cheap) money (without backing) on the market. This money “catches” too few goods (products and services). Therefore, the prices increase. And this is not rocket science that the average intelligent adolescent could not understand. Unless, of course, these “youngsters” are sitting in Robert Golob’s government. Then their ability to understand simple economic laws is drastically reduced.
In any case, too much money on the market is usually caused by governments that have a monopoly on the printing of banknotes and coins. New money in circulation, for which we want it to be stable and not lose value, needs to have a realistic basis. Some harmful policies (such as the green agenda) have increased the need for money. Since the economy cannot create so much money (billions of euros) and send it to Brussels, the European bureaucrats simply decide that the central bank (ECB, or the FED across the pond) will print money without cover (this is how they launched the quantitative easing programme). Inflation is thus, in a sense, a tax (para-tax) for consumers.
The problem for the European Union (and thus also for Slovenia) is that despite high inflation, no one wants to give up expensive “green” (and other) programmes (and the extensive bureaucracy), even though it is clear that increasing government spending will make the inflation problem worse. For if the authorities insist on a very costly green (sustainable or whatever it is called) energy transformation, the need for additional fresh money will further increase. This means that even more money will have to be printed from scratch. The European Central Bank (ECB) may have raised interest rates to curb inflation and bring it below 2 percent but printing more money will do nothing to help (and, if it has not already, the ECB will find itself in a downward spiral, from which there is only one way out – a complete crash and a new start.
Solar power plants are Golob’s suicidal project
Even though our Prime Minister Robert Golob predicts that inflation will stabilise and fall in the autumn (and it probably will – temporarily), in the long term, there is little sign of any improvement. But there is more. If Golob really goes ahead with the construction of a series of large-scale solar power plants, which a third of Slovenian households are expected to have access to by 2025 and which will cost a lot of money, Slovenia’s finances will collapse. To afford such an ill-conceived energy project in the face of such a severe global crisis, which is coming, and which will not be a normal economic crisis, you must be either corrupt or suicidal. Even the projects that have already been announced, which somehow follow the globalist Brussels agenda (from energy to social and the green agenda to gender equality), will probably already spark revolt and perhaps even bloodshed as soon as this autumn (remember the Dutch farmers’ protest, which is only a prelude for much worse things to come to the old continent). The problem with today’s (right or left) authorities, who for the sake of peace mostly follow progressive and left-wing wishes and demands, is that they are more focused on ideology than on the real needs of the country (or the European Union) and the citizens (or individual EU member states).
A government that wants good for its country, with the inflation we have today, will do at least five things that are logical to every person with common sense: It will tighten the money supply through the central bank at higher (not to say very high) interest rates, reduce the size of the public administration sector (cutting red tape), cut taxes, cut public spending, and deregulate the state (thus reducing the number of regulations and restrictions). While this recipe (historically used by wise leaders such as Ronald Reagan in the “great inflation” 40 years ago) triggers a short and painful recession that significantly reduces economic growth, once the measures start to work, the country starts to grow on a healthier footing and is even stronger than it was before the crisis (which is similar to what Estonia did in the global financial crisis of 2008). By contrast, the Golob government wants to increase taxes, the size of the public administration sector, the use of public money (to obtain sustainable and environmentally friendly, whatever that means, energy sources) and the number of regulations (which will be coordinated with non-governmental organisations, which means that the government and the parliament will actually be run by the street). The only thing is that the ECB will raise our interest rates. But that will be the ECB’s doing, and not that of the Golob government.
This all seems awfully as if the Prime Minister and his ministerial team not only do not have any idea about basic economics but are also doing nothing but making matters worse. And what is even worse: the government does not have any solutions to the problems. Therefore, things will not get better – they will get worse. Even those without the Nobel prize in economics know that.
There are only two possibilities: either the government is stupid, or the government believes that the people are stupid. That we will reduce inflation through more public spending and tax increases. Do I understand this correctly? Is it not more logical to allow people to keep more of their money (with lower taxes), and they will use that money to buy things and create economic activity? It is true, however, that in this case, there will be less money for harmful NGOs and self-employed cultural workers with dubious artistic reputations. Those (and there are many of them in Slovenia) who think that they are going to get rich from pyramid schemes or hit the lottery without buying a ticket can be made to believe that the opposite is true. As can be those who believe that advice about which fruit will help them get rid of fat from their buttocks overnight. Just try it! I am telling you that a thin slice of watermelon placed on the belly overnight will give you a “six-pack” in a few hours. And if not, it is because you did not follow the instructions correctly. That is the (socialist) logic of the current government.
The mainstream media supports the government’s crazy ideas and the road to disaster
Statistically speaking, inflation will certainly (at least temporarily) fall soon, but the measures of the Golob government themselves (subsidies, allowances for the increased prices and any other such things) will not in themselves bring down the prices. And unfortunately, we have the mainstream media outlets that (I am sure of this) understand this but support it anyway (because of their ideology). The media are just repeating what they have been told to do, so they will be (and already are) complicit in the destruction of the economy and the current way of life.
The recession is coming, there is no doubt about it. When all of the crazy and crazier government ideas stop working, the economic catastrophe will continue. It is hard to believe that Golob and his government are capable of change. Following the agenda of the left and the street will not end. But their greatest wish will be fulfilled because we will all be the same – in poverty. With such a turn of events and such predictions (measures), the wealth gap (excluding the globalist elites) will narrow and the less-well-off and the middle class will be destroyed or merged into one big class – the poor.
I don’t know about you, but for me, this is not a good reason to pop the champagne and be optimistic.