We have all feared this and are suffering because of its effects. This is called inflation.  When you blow up a balloon, the balloon is inflated.  Would you rather have a balloon inflated or deflated? Would you rather have a bicycle tire inflated or deflated? Would you rather have your ego inflated or deflated? How can we inflate money? Is there a special pump that does this? Just as a doctor, when treating you, uses words that you do not understand, bankers in corporations will refer to words that are designed just to frighten you.  Inflation is one of those scary words. It doesn't really mean anything.  So, let’s talk about the real issue at hand, which is becoming afraid that it takes more or less money to acquire an object. 

If milk is $1 a gallon, and next week it is $2 a gallon, then it is going to take more of your money to purchase this milk. For some reason, milk would go from $1 a gallon to $2 a gallon.  If a farmer with 100 cows is providing the milk, and some of his cows die, this leads to a shortage of milk in the community.  Many people are desperate for this milk, a bidding war ensues, and those that are willing to spend the most money get the milk.  If you are not willing to bid $2 a gallon, you will not receive any of this milk.  The cows do not even have to die; you could just have rumors that there is a cow disease going around and there may not be enough milk next week.  Everybody is rushing to buy as much as they can just in case. This can also lead to a bidding war. 

The next scenario that could happen is when a farmer who takes care of the cows wins a $500 million lottery and decides to retire, loving and caring for his hardworking cows; he decides to give them a rest and no longer milks the cows. This would put a lot of stress and pressure on another farmer in the community who doesn’t have sufficient cows for the community.  This could also lead to a bidding war, and could raise the price of milk.  

The farmer who is providing milk for the community could have a wife who wants a brand new home, but with the current profit margin, he does not have enough money to build her a new home.  He doubles the price of milk, knowing that he is the only source, which forces everyone in the community to either pay the price or not get any milk.  

Everybody says that in a free market society, if you raise your prices too high, you will not have competition.  I have never seen a free market society in all of history.  This is like the tooth fairy and Santa Claus. Every market has been controlled by a matriarch, a patriarch, religion, or an army.  In each one of these markets, the ability to engage in the market depends on the relationship that you have with one of these facets of governing. When the queen grants you a commission for milk, and you are the only one who can provide milk, then you can raise the prices for whatever personal profit and gain that you wish.  

Now let's say that we give every person in the city an extra $100. Should this cause the price of milk to go up? The farmer also received $100 in his pocket, so he is just as well off as everyone else.  The farmer has been charging $1 per gallon because this is what he needs to take care of his family. There has been nothing in his operational costs or in his family needs that has changed. There really is no reason for him to raise the price of milk.  Unless his wife has been nagging for a new home and he thinks to himself, “Everyone has spending money; I will raise the price of milk so I can build a brand new home.” He has now created a tax on everyone in the community so that they can subsidize his brand new home.  He did not acquire the new home because he has spent more hours milking the cows or run his farm more efficiently, nor did he mentally convince the folks in the community to buy more than a gallon a day for them to be healthier.  He did nothing. This increase in price is merely a tax.  

When corporations raise the price on a product just because they can, they are now taxing their customers.  This increased price on a product doesn’t provide value to the customer; it only reduces the spending power that a customer has with their specific income.  This could also cause the customers to become upset, and they in turn start charging for their services to afford the higher cost of milk.  

Now the farmer who raised the price of milk to build his wife a 200k house finds out from the architect that the house will really cost 500k.  Now everyone is in even worse shape than before.  People who were poor have less opportunity to raise their prices, so they will suffer even more while the big boys argue about who is going to be on top. 

These increases in prices have nothing to do with how much money people have.  What drives the prices up is greed and an egocentric view of trying to become other people.  This is compared to the king of the mountain, where kids will establish themselves on top of a pile of dirt to determine who is the king on the mountain.  Constantly they are climbing up and being thrown back down to the bottom; eventually the king is dethroned, and then we get a new king. The process continues. 

No one has any more milk than we had before. Usually we end up with this method, because climbing up the hill and pulling others down consumes time and energy that they could be putting into their business or their families. In order to pay for this war, they will need to charge more for their products, which will cause the price of their products to increase. It is not very easy for someone to take their place in providing products because all of these people have special licenses that grant them a monopoly on their services.  All industries have this.  

Countries that have a republic, which are the USA, Russia, China, England, and North Korea, all have this process going on.  If you want to receive a license or a permit for a product, you need to pay millions of dollars to a representative to pass laws that stop other people from competing against you.  These countries also have a thing called a patent office where, if you are the first one to file a piece of paper, then no one else will be able to produce that product. This is not a free market.  This is a market controlled by the elite. 

The corporations will pay a subsidy to the elite, which they will pass on to their customers.  This wouldn’t be so bad except that when they pay a $1 subsidy to the elite, they then turn to their customers and charge $5 more to pay for a 10 million dollar mansion for their daughter.  All of this causes the prices of the goods to be higher and higher while the wages of the disenfranchised to increase very little. This makes it more and more difficult for people on the lower end to pay for housing and products. Eventually, if this continues, you will have a very small community of the elite surrounded by billions of zombies who will eventually break into the compound and eat the brains of the elite.  

Another scenario that can cause the price of milk to go up is if the farmer receives a 2% increase in feed or he has to pay 2% more to hire a helping hand.  This should cause him to raise the price of his product by .5% because the price of his product is not worth 100% of the cost of labor.  An example of this was when Elizabeth Warren was interviewing CEOs of major restaurant chains: “What reasons are behind their inability to pay a decent wage compared with the prices that they were charging of the customer?”  Reading from their own corporate information where they were listing their cost of running business so that they could attract more investors to invest in their company, Warren stated that “To raise their starting wage to $12 an hour at McDonald's, and they were selling a $7 value meal, they would only need to charge ten cents more to cover their wage increase. 

Another restaurant owner that was in the same room complained: “At my restaurant our meals cost $15, we could not afford to pay more wages on a ten cent increase.” Warren replied, “You would have to charge 20 cents more.” The restaurant owner replied, “If I have to charge twenty cents, I will have to charge $5 extra.  Currently, Kentucky Fried Chicken has increased their $5 meals to $5.49 in order to pay for the increased minimum wage.  Of course the wage increase hasn’t gone into effect for a majority of their restaurants across the country, and it may take five years for this to happen, but at least they are getting 10% on top of their profit so they can buy their wife the penthouse in Dubai.  They only really need to raise the price by less than ten cents, but why increase the price by ten cents when 49 cents feels so much better? 

What percent is 10 cents out of every seven dollars? 

This is just over a one percent increase. The corporation has been raising its prices by two to 4% for the past 50 years, and the people working for them have been paying more money for rent, food, and transportation.  If you are a banker, real estate agent, or senator, you have received these increases for all of these fifty years.  In real estate, if you get a 6% commission on a $200,000 sale, and then the price for a home goes up to $300,000 for the same house, then the amount of money that you make goes up with inflation. When a banker makes a percent off of the deposits, this makes the banker's income go up with inflation as well. If you are a senator, then you can vote yourself a cost-of-living increase. 

As new inventions and innovations occur, the cost of making the products declines. This should lower the cost of products which economists love to call deflation.  This is also a phoney term. It does not mean anything. The cost of producing products for the past fifty years has gone down with increased efficiency, automation, and new technology. This has not been the case for the sales of the product, however. The corporations have been increasing the cost of the product to rise with the 3% inflation per year.  

Another reason that we have 3% inflation is that a banker will pay you a 3% increase on what you deposited.  With 3% inflation, then the banker in reality has paid you nothing for putting money in his bank. The interest that you make off of deposits you must pay income tax on so this could reduce the 3% down to 1.5% all the while your money being paid goes down 3% every year. You are still losing money.  

This is comparable to a donkey trying to catch a carrot hanging in front of him. No matter how hard he pulls the cart, he will never be able to catch up to the carrot.  

I keep hearing from people saying that you should work harder, smarter, or more efficiently.  This is not what the corporations are doing. What they are doing is charging their customers more while paying their workers less.  

This is quite a complex situation. We are presenting this as simply as we can.  There are many forces in the economy- greed, ignorance, politics, and the weather- that can influence the price of products. This is comparable to sending a rocket to the moon. You have to calculate how much fuel to get the rocket to escape velocity. You need to understand what escape velocity is.  You also need to factor in wind resistance.  You will need to know the speed at which the planet Earth rotates around the Sun and the speed at which the Moon is rotating around the Earth. You will need to know that these rotations are not circular, but elliptical.  All of this can be quite complicated and will take a team of people and computers to calculate what is really going on. It would be very easy for a scientist to oversimplify this explanation to a layperson.  Just as with bankers, it is quite easy for them to fool you with big and confusing words about what is really going on.  

Let's take the idea that inflation is caused by greedy employees wanting a higher wage.  For example, you can have a city with a million people living in it, and you were to bring in $200 million into the city for a month; would this make the cost of goods increase? No, it would not. 

This is only $200 per person.  This would only allow people to buy an extra $200 worth of goods for that month.  Stores would be selling more products so they could actually lower their cost of goods because each store has a thing called a nut. In order to afford to run the store, they have to sell x amount of dollars every day to pay for the cost of the store, their products, and their employees.  Once they have reached their nut, or their base cost, they can actually sell products less than normal because they don’t need as much money off of each product.  

Another scenario is when we give each person in the city a million dollars. This could cause lots of confusion. They could have ten different customers coming in for the new Four Wheel Drive.  They only have one in stock. This causes a bidding war, which makes the cost of the vehicle increase. 

It takes an insane amount of money to cause inflation.  Just like if you were to breathe pure oxygen, this would kill you. If you were to drink ten gallons of water every day, this could kill you.  If you were out in the desert with no food and water for several days, and they take you to the E.R., it may take extra effort to get your electrolytes, energy, and fluids up to the correct level. Still, if they gave you too much food, fluids, or energy, it could cause death. 

This is an argument that corporations give when they say they cannot raise wages because it will cause inflation or economic death.  This is not what we are talking about.  We are not talking about overwhelming employees or customers with large changes.  

An example would be in 1970, the minimum wage was $1.70 per hour. Houses cost $20,000, gas was $.25, and a can of soup was $.12. Today everything has gone up at least 15 times in cost. If you were to have the same buying power as you did in 1970 on minimum wage, then you would have to be earning $23 per hour. In 1970, very few people actually worked for minimum wage, and most earned three times minimum wage.  The average wage in 1970, adjusted for inflation in today’s terms, is $65 an hour.  Because of increased efficiency and computers, the cost of producing all products has gone down.  Wages have only gone up less than five times while the cost of living has gone up fifteen times. 

Now we have a large group of people that you compare that have been in the desert for the past 45 years with barely enough food and water to stay alive.  These people need a gallon of water and 1500 calories a day just to survive.  They have only been getting one quart and three hundred calories a day.  Now the employers are complaining, “We can’t give them two quarts and 600 calories a day, as they are just being greedy.  Fifteen dollars an hour is not enough to pay for rent and food.  People have to share a home with four or five income earners and get food stamps just to be able to survive.  

Yes, making a big change will shock employers and employees.  It is a sudden, quick change that causes a shock, not the amount of money being paid to employees.  If you are standing next to a swimming pool and it is 90 degrees outside, and the water is 65 degrees, as soon as you jump in, you will feel a large shock from the freezing cold water.  65 is cold, but it ain’t that bad.  

This would be like standing outside where it is 25 degrees, and you are naked, then you jump into a hot tub that is 105 degrees. The water will seem intensely hot compared to ten minutes later where it will seem quite comfortable. It is the sudden change that causes the extreme panic or shock.  

If an economy is not gradually adjusted to fit the new conditions, it will be a shock to everyone.  Shock can cause sudden death.  Most trauma patients do not die from their injuries; they die from a thing called shock.  

The problem that is occurring with income inequality is not that everyone wants to be the same. When you have some people making huge amounts of money, and other people making smaller amounts of money, and the cost of goods starts increasing in relation to the wealthy, then it becomes difficult for people just to make their basic needs. An example of this is when, from 2004 to 2006, the price of homes increased quite rapidly. Part of this was because of the transfer of power from Britain to China over the control of Hong Kong. This caused many people who were living in Hong Kong to be fearful of the Chinese “Communists”.  They were fearful of being controlled by the Chinese dictatorship. Property in Hong Kong was incredibly valuable because of the opportunity that corporations had for trade and commerce.  They were willing to pay any price for housing in Hong Kong. The Chinese who were able to sell their property could sell a two-bedroom apartment for six million dollars. They did not understand the value of money, so being British citizens, they moved to Vancouver, Canada, and started buying homes to live in. These homes were selling for a mere $200,000 at the time. As there were thousands of Chinese looking for homes, and they all wanted the nicest ones, they would be happy to spend 2 million dollars for a house that the year prior had sold for $200,000. 

It was a bidding war.

This caused the price of housing to increase greatly in the greater Vancouver area.  People who sold their house in Vancouver could purchase another house in Canada in another city and one in Washington State.  Even the wealthier ones would go to California and buy oceanfront property.  People that had $500,000 in California were getting offers for five million dollars for their house.  Some people received offers with their pictures and furniture included in the price of the house.  These people from California would move to southern Utah that could have a 20,000 square foot house built next to a golf course for $2 million. 

This sudden influx of money caused the price of housing to go up.  Bankers started to lend money to people without qualifications because houses increased in value every single month.  This is like blowing a balloon up to the point where it pops.  

The rise in prices did not come from paying the folks at McDonald's $15 an hour.  The prices increased because of confusion, political conflicts, and overexcitement, and miscalculations about the economy.  When prices started to decrease because everyone became worried and thought, “This has got to stop sometime.” So people started taking their funds and putting them in their vault in the basement just in case the balloon popped.  

This caused the balloon to become brittle and pop even faster than before. There was no real reason for the economy to collapse except for the fear that started to spread into the community.  When a few people who had overspeculated had to declare bankruptcy, this fueled the fear even more.  This crisis did not occur because the wages were increased at Burger King.  

If the wages had been increased at Burger King, the workers could have paid their bills, which would have decreased the panic. We are not talking about raising the minimum wage to $500 an hour. This would shut the economy down.  This would be like drinking 5 gallons of water a day. This would kill you. This is just going from one pint to two quarts just to keep a person healthy and alive.  

Only Two Oars:

The following scenario will be easier for you to understand if you first slow down a bit.  For every few first moments that you spend calming yourself down, your ability to concentrate will increase. So breathe with me. Breathe a deep breath out. Go the whole way, push it out. Now take a deep breath in, bring one swooping big breath in. Then, let the body breathe how it wishes.

To understand inflation, we are going to have to go back into the time of the Vikings. Vikings are very strong people who pride themselves on hard work, strong ethics, and of course, their Tribe.

This story begins with such a group of Vikings who were stuck in the middle of the Pacific Ocean, and they were all ready to go home. Disputes plagued the people in the boat, and the leaders concluded that because paddles cost so much money and they wear out quickly, only two of the Vikings would be able to use oars at a time. They were in the middle of the ocean without a motor, without sails, and the height of the deck was much too low for them to paddle by hand with any efficiency.  There were plenty of paddles, plenty of ambition from the crew, and plenty of water to oar. 

Now, experienced, great seeker of light, I want to make this as easy as possible for you to do, so we gotta slow down a little bit. Breathe out completely, all the way, and push the breath out. And then breathe in big, let the air come into your lungs, and feel them big with a big breath of air. 

Let the body breathe for now. Let yourself check out your world without making any judgements.

We are ready to see what you think about the story?

What was on the boat? What were the resources the people had in the ocean to get back to home?

What was the real problem about the boat?

If the oars were metaphors for money, how would this apply in our world today?

What is the problem in the scenario? 

Take a few breaths right now 

As with giving a few smiles or genuine compliments we may find our community change, with more money in the right places at the right time we can experience our community change.

How can we find balance?

Keeping money balanced.

Metaphor of blood flow in body.

Supply and Demand?

How much money is in the world?

How much of a stimulus it would take to change the law of supply and demand.

What is poverty?

What is affluence?

What kind of money would it take to get everyone out of poverty?

How much money to the poor would affect inflation?

Case studies of inflation in U.S. history, African history, Europe, south America and Asia.

bernie madoff “we assumed they would act in their own best interest.

People in fear clogged the flow of money...opportunities to trade will be passed up.

As in during the depression it was not that there wasn't enough food, rather the psychology that governed the economy kept people from being bold.