Inflation; the EU project and the challenge of so called “inequality”

AW, Going-Postal.Net
Money, lots of money

Is inflation a good thing, or a bad thing? If you are a Middle class Brit, aged in their 30’s with a big mortgage, inflation is a very good thing indeed! Rising wages reduces the effective cost of your mortgage repayments but more importantly increases the value of your home, reducing the relative overall cost of your debt.

Inflation has been fundamental in enabling the United Kingdom to pay off its war debts and also recover from the financial mess of the 1970s. Inflation was instrumental in enabling people in our country to buy their own homes in the 1980’s through to 2000; Inflation has in effect created free money through the creation of equity. Churchill always said that we live in an entirely false economy.

Sadly if you are in your twenties or mid-thirties you have quite likely missed this boat. High loan to value mortgages and stagnant house prices (for normal people) has meant that in the past 10 years you have very little to show for your hard work and investing in your own home. Compare that to the preceding 10 years, or even the 10 years before that, where you could have expected to double your money easily. Low inflation has not been good for you! Your house is worth the same, your wages are the same, and you are quite literally going nowhere.

So we don’t benefit from low inflation, but guess who does?

The EU project is the political union of nations and the formation of a European superstate.

Within the EU there are significant differences between the wealth and economies of different nations. The creation of a superstate is dependent upon tackling this so called “inequality”, which is actually the disparity between nations’ economies. Inflation is not good for the EU as it actually results in more inequality as stronger economies get stronger and weaker ones, relatively speaking, get weaker.

If the economies of countries such as the United Kingdom or Germany had high levels of inflation what would that mean for countries such as Greece? If the economies of different countries were growing at different rates how could the EU ever tackle inequality?

Think of it. If economies like Germany are doing well, wages and prices should be rising. Same here in the UK. But wages are not rising and in other countries like Greece, poorer nations will struggle to buy food or even provide public services.  Sound familiar? This is the problem of inequality.

So the EU must give the poorer nations money to help them catch up, which is another story altogether, so for now let’s stick to inflation.

So how do you control inflation? It’s basic monetary policy, you use interest rates. Inflation rises and you put the brakes on with an increase in interest rates.

But hang on, if we put interest rates up in the EURO zone, that will slow down growth and given levels of debt, would result in financial meltdown. In the UK it would cause the housing market to fail. Oh no!!! Rising interest rates would definitely be very, very bad.

But…..there is another way. There is an alternative to monetary policy. A way to control inflation whilst preserving low interest rates to help growth allowing poorer nations time to catch up. Fancy a bit of this? Sounds good?

Well, the answer is……. free movement of people!!! We are repeatedly reminded that this is essential!! Why? Wage inflation is the key driver of inflation and literally flooding more affluent countries with people prevents wage rises and inflation. Sound familiar? In fact it also reduces the burden on poorer economies by reducing their own populations. In fact it’s such a good idea, let’s bring even more people in from other parts of the world as fast as we can. A free for all!!

Good for the EU project, (in their minds and pockets) but bad for you.

That is why although the people are completely dumbfounded about immigration the EU and politicians are proactively facilitating it. The future of the EU depends upon it.

Unfortunately the EU doesn’t work for us. It is preventing our growth, and doing so deliberately.

Leaving the EU would give us the ability to invest in our economy and increase wages. Rising inflation will help us pay down our debts.

Remaining in the EU, will see our economy stretched even further, through even more immigration. Less investment into industry and more expenditure on our public services. Restricting real growth, stagnating our wages and freezing the value of our homes. Our debts just getting bigger and bigger. Sound familiar? We have just had 10 years of it!

There is an obvious answer to the question in June.

AW ©