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Inflation - The Cruellest Tax

by John de Roe.

Inflation is the nastiest of all stealth taxes, a tax that that hardest on people who have done what government and financial institutions advised, lived thriftily, planned for their retirement, paid a substantial percentage of their hard earned into a pension account, controlled their debts, paid their bills and amassed a nest egg as insurance against hard times and to provide a few luxuries.

Infltion is, in effect a financial mechanism to transfer wealth from savers to the state. From a political leader's point of view it is preferable to punitive tax increases in that voters are less likely to blame the politicians who screwed up the economy than to ascribe their misfortune and the dwindling value of their assets to the wider economic crisis . Economically, however, inflation is worse than taxation. It penalises thrift, rewards prodigality, disadvantages financially stable businesses and weakens competitiveness.

For thirty years following the end of World War 2 in 1945 British governments of both Labour and Conservative parties used inflation to erode the debts Churchill had unavoidably incurred during the War. As a result Britain fell further and further behind its rivals both in terms of output and living standards. In the mid-1970s, with a third debt crazy and financially incompetent Labour government in power since the ending of hostilities we were close to meltdown: power shortages had put the country on a three day week, prices and incomes policies had squeezed workers while inflation ran in double figures, and the unions were out of control. There were constant strikes and it was difficult for bosses in a unionised environment to get any worker to do anything they did not feel like doing.

I was never a fan of Margaret Thatcher but at least the Conservative team she led appeared to understand the problem. Strict control of the money supply would bring down inflation and so make possible a national recovery. The economic that carried the Conservatives to power was opposed by 364 leading economists in an open letter to the media. These were the self styled Keynsians although their addiction to big government, an ever expanding public sector, constantly increasing taxes and borrowing by selling bonds to fund deficits.

The economists would have had the new government continue with the policies that had twice seen Labour governments appeal to the International Monetary Fund for help and had twice seen the IMF impose draconian austerity measures to bring the haemorrhaging of money under control. Measures far more harsh than the austerity measures the coalition government is now imposing to the fury of left wing politicians and academics who, true to the track record of the left, are insisting their is the ONLY way and we should defy logic and continue to spend, funding our deficit when we can no longer sell our bonds on the international market by printing money.

That way lie Weimar and Zimbabwe.

How inflation works to help facilitate the thinking of this insane cabal of left wing authoritarians (yes, that is a coontradiction but it is also the political position of many politicians who refer to themselves as liberal,) is that in a modern economy the amount of money in circulation should reflect the total value of a nations assests.The traditional was of regulating that was by making a currency unit worth an amount of gold or lesser precious metal. Thus in Britain when we were the world's leading economy, a pound (weight) of bronze coin was worth a gold sovereign. All prices derived from that, a 2 pound loaf of bread was fourpence (the price was regulated) to stop profiteering during grain shortages.

Start printing money and for each £billion put into the economy the money already in circulation becomes worth a little less. Traders want to live decently and nations we import from want to be sure their farmers and workers and businesses are getting a fair deal and so prices go up. And money buys a little less.

Normally in times of inflation interest rates are raised to curb the inflationary pressures in the economy. In the current bout of inflation fever however rates have been kept insanely low. This, we are told, is to stimulate economic recovery but it is not working. While governments are running such huge deficits the banks can make easy money by borrowing from central banks at 0.5% and lending the same money back to the government by using it to buy bonds paying 3.5%.

While that goes on there is no end in sight to the economic depression or to the deficits being run by some of the world's biggest economies. So long as there are no other options available inflation will continue and peoples' savings and nest eggs will continue to evaporate.

In the 1960s The Who released a record called, "Won't get fooled again."

Somehow we always do get fooled again.

Successive governments have done the right thing in standing up to the whining of the left and risking temporary unpopularity by attacking Britain's deficit early in their term of office so the benefits will be apparent by the time they must face the electorate.

The economy has moved back into growth and now sems to be slipping back towards recession. Inflation is already taking off. Fraser Nelson reproduces an eye-popping table of consumer prices, showing double-digit rises on last year. Yet the Monetary Policy gurus continue to hold interest rates artificially low whining that to raise rates will make us uncompetitive.

Do we have to go through the whole nightmare of the 1950s and 60s again. Stagflation, Labour finance ministers talking about 'squeezing the rich until the pips squeak and and the rich simply taking their money and leaving the country for more money friendly environments. The singer Tom Jones talking on television about his life recently said he had always though of Britain, the Welsh Valleys in particular as his home but he felt compelled to live abroad when in 1970 with supertax rates at 97% he learned he had earned £1 million the previous year and ended up with only £40,000 in his pocket.

According to the received wisdom of economics inflation is supposed to be kept below two per cent. In spite of all the accounting trickery to disguise the true figure it is officially running at tice that and gathering pace. Western nations must stop printing money and start raising interest rates. Inflation must be stopped now. If we do not we are heading for disaster.


"Revolution Has Begun": 75,000 Brits Plan To Stop Paying Power Bills In Protest At Energy Rip Off
Resistance is growing to spiralling domestic energy costs in Britain as more than 75,000 irritated people in the UK have pledged not to pay their electricity bill this fall when prices jump again. 

If the government & energy companies refuse to act then ordinary people will! Together we can enforce a fair price and affordable energy for all," tweeted "Don't Pay UK," an anonymous group spearheading the effort to have more than one million Brits boycott paying their power bill by Oct. 1.

Panama Papers: British Elite Linked to Corruption, yet Media Only Focuses on Putin It is clear (and very easy to research) that many Amerocan elitists, including prominent political figures are involved in the Panama tax haven scandal. So why are British news organisations focusin on David Cameeron, the Conservatives and Vladimir Putin? Could it be the Gerge Soros funded group behaind the leaks have another agenda besides exposing (perfectly legal) tax avoidance?

How To Help The Poor - A look at how mainstream politics talks of fairness but penalises poverty
All three mainstream parties in the May 2015 General Election are focusing, as they did last time, on fairness, equality and helping 'the poor'. As their senior spokesmen piously pontificate there will be no trace of irony from either Conservative, Labour or Liberal Democrat while the spout such bollocks, even though they know their economic policies will penalise the poor.

Things That Make You Boggle ... Like The Misplaced Confidence Of Academics
Why are economics academics always so sure that their predictions are correct. Given the abysmal record on economists on calling the economic trends correctly even after they have happened let alone ahead of the trend, you would think exponsents of the dismal science would be a little more cautious in proclaiming their gusses as evidence backed facts. They never seen to learn however.

Inland Revenue a Dysfunctional department that ‘can’t be trusted’ with power to raid bank accounts
Plans to let the taxman take cash out of people’s bank accounts without their permission were condemned by MPs after Rebecca Benneyworth, of the Institute of Chartered Accountants, warned the department is ‘shooting itself in the foot.’ She told the ICAEW conference : ‘Public trust in HMRC would be eroded very quickly if cases come to light where funds have been incorrectly removed. ‘HMRC cannot afford to have public opinion turn against the tax system and those charged with administering it.’Accountants have warned HMRC cannot be trusted ...

The Second Wave Of The Debt Tsunami or The Coming Of The New World OrderAs the debt crisis stumbles on in Europe, the U S A and around the third world all politicians and governments can do is keep kicking the can further down the road. Nobody is prepared to admit that the economic model based on perpetual growth funded by personal debt and public spending has failed. So where do we go from here?
Britain' Leaders Must Ignore The Messianic Promises Of This False Prophet Of Economic SalvationAccording to his fans Paul Krugman is the greatest economist of his generation. So why does he telln us he can solve the economic crisis when all he can offer is a return to the borrow and spend policies that created the mess in the first place.
Green Policies Will Not Save The Planet But Are Costing Poor Families The EarthPoliticians bleat about the plight of the poor then press on with their clean, green, sustainable energy policies which include stealth taxes to subsidise expensive and inefficient wind turbine and solar panel power generators. Can they not see it is the green agenda that is driving up inflation ...
Drop in UK inflation Is Not Good NewsThe Office for National Statistics has reported a sharp fall in the Consumer Prices Index - down from 4.8 per cent in November to 4.2 per cent last month - was the sharpest drop in the annual rate since December 2008 when the UK was in recession and VAT was reduced. Government ministers and propagandists will try to talk this up as a sing that the economy is starting to recover. We should be wary however, in the current economic circumstances a drop in inflation, especially one this rapid in what is traditionally the best month of the year for retailers, is not good news ...
Financial MadnessWas the credit crunch as the media called it really caused by the geed and incometence of the banks and the inabiliy of us ordinary punters to manage our affairs. Or was it all due to the financial madness of politicians who engineered a a system that depended on infinite growh in a world of finite resources.
Shock, Horror! Coalition Spending Cuts Cuts Will Mean 50,000. NHS Job LossesPredictably the left are screaming about the claimed 50,000 jobs that will have have to be axed by NHS trusts across the nation to meed government budget reduction targets. What NHS managers are doing however is following in the footsteps of Labour controlled councils and rather than losing the candy - floss jobs created by empire building bureaucrats are slashing front line services to punish users of the service for ...
Interest Rates Must Start To Rise Very SoonThe Daily Stirrer has warned you to brace yourselves for rises in interest rates. As it is the Bank of England has kept rates at an insanely low level for far too long in the face of evidence that their policy had completely failed to achieve its stated aim and boost the economy. Now with the economy stagnant, the jobless figures flatlining but likely to increase as public sector jobs are shed and inflation

The Downfall Of Lybian Tyrant Poses Another Threat To The WestAnd as Gaddafi's 40 year rule draws to an end in what increasingly appears to be a bloodbath we offer a roundup of the best comment from foreign correspondents in the national press about the world's reaction ad particularly that of the man in the White House who only two weeks ago was preening himself as he posed as a liberator of the ...

Getting Naked In The Financial Markets
If you've heard of hedge funds and toxic debt you might well think these are the most evil manifestations of the financial markets that plunged our economy into the abyss. Unfortunately there are far more fearsome demons, arbitrage, short selling and naked short selling. Anyine wanting to know how insane pertsonal gred has made the people who are supposed to prudently invest our savings and pension fund money in currency, bond, commodities, stocks or any other financial market this is a must read.
Are The Cultural Poles FlippingReligion and Science (which some people have turned into their religion) have failed to provide the certainties, the sense of security, that many people seek. First religious convicion was eroded by science and then faith in science collapsed when it's certainties dod not stand up to the logical tests of the real world. Can existentialims offer a third way or is its acceptance of uncertainty to challenging?

The Debt Threat To Our Way Of LifeJapan's Triple A credit rating has just been downgraded, that of the USA is looking a long way short of secure.What is going on in the world of finance when economic powerhouses like these are in trouble? Is the continuing financial criis and the threatened meltdown in the bond market just a knock on effect from 2008's problems or is something bigger going on?
Coalition Government Urged To Make PFI Profiteers To Repay FundsFrancis Maude, the Cabinet Office minister, claimed that many PFI deals were "ghastly" and imposed an unfair "penalty" on schools, hospitals and other public services. It is understood that Cabinet Office and Treasury officials are examining PFI contracts worth billions of pounds, looking for ways to claw back money for taxpayers. Signalling an end to the era of PFI, Mr Maude said the Coalition's plans for a ...
Gambling In The Euro Casino At Vegas on the MedThe Daily Stirer has warned of the collapse of the Eurozone and the death of the single currency before. It was not a hard call to make, tying traditionally weak economies to a strong one like Germany's and thus blocking off the traditional route to eliminating debt in the weak nations, devaluation and inflation, was bound to wreak havoc with the economic basket cases of Southern Europe. The single currency has only survived so long because Germany has been willing to prop it up.
Financial AlchemyFor three decades it was alchemy. Banks and corporations pullede off the equivalent of turning lead to gold by turning liabilities to assets and then using those very dodgy assets to secure loans. It could not last of course, sooner or later someone was bound to work out how the illusion of turning debt to wealth was performed. Find out how here...
UK Economy Slipping Back Into Recession?Gross domestic product fell 0.5pc in the fourth quarter, the most in more than a year, the Office for National Statistics reported on Tuesday. The decline compared with growth of 0.7pc in the third quarter.George Osborne insisted that the Government will press ahead with planned cuts to public spending, despite warnings from forecasters that the economy may be too weak to withstand the package. Blaming the growth figures on the cold weather, Mr Osborne maintained that a weakening in efforts to tackle ... By 2015 Credit Cards Will Cost Families £1800 a yearLast week The Daily Stirrer warned that rising inflation meant interest rates would have to rise sharply very soon. Today as we learned that by the so called factory gate price measure infkation has gove over 4% the economic pundis of mainstream media are as usual playing catch up..
America's Debt Crisis Traps Less Well Off In Depression ConditionsNews this weekend has been dominated by the assassination attempt on a Democratic Congresswoman and her companions in Tuscon, Arizona. As the story is everywhere there is little point The Daily Stirrer commenting other than to offer our condolences to those injured and the families of people who died in the attack. What this incident has done however is to focus the attention of the outside world on some very worrying social trends in the world's most powerful nation, namely the polarisation on political, racial and regional lines and the seething anger at most levels of ...
Interest Rates To Rise SixfoldOnce again The Daily Stirrer says, "We told you so.

The Economy Of The Living DeadThough governments talk about recovery we are stuck in the economy of the livind dead, the global financial system as become a zombie. Is there any way out?
by Ian R. Thorpe:
Magic Money, The Free Market IllusionNot so long ago politicians and bankers were full of confidence bordering on hubris and they were telling us the good times could go on for ever. So where did it all go wrong. The finance industry blame politicians, politicians blame the finance industry and they all blame us as they try to dream up schemes that will enable the world to carry on prining worthless money and lending it to each other...


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