Whoever thought Bereansatthegate would feature a quote for the day from Lord Keynes? Yet here we are:
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but at confidence in the equity of the existing distribution of wealth….Lenin was certainly right. There is no subtler, no 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.”
Why I decided to highlight this quote is due to the ongoing financial repression in the U.S. whereby the Federal Reserve is systematically taking money from savers via inflation and driving up asset prices which primarily benefits the rich! With so much concern over wealth inequality, why is there not a cry on the left to stop financial repression? Why doesn’t Mr. Obama decry the Fed policy and call for a real return to saving, rather than systematic theft?
Of course, this very excellent analysis by Lord Keynes was effectively repudiated by his General Theory, which at root was calling for inflation as a way to get intransigent union workers to accept real wage cuts when they wouldn’t ever accept nominal wage cuts. But at this earlier writing his analysis is spot on.