Good to see your blog on Raw Materials Economics, RME, which I came to through a link on the NORM site.

I am interested in the practical advocacy of parity as policy, as the “missing link” so to speak as regards fundamentally addressing our economic problems. Obviously knowledge of RME is in the minority at this time, but I believe that the conditions are right towards igniting such a challenge and movement.

A strategy of education and recruitment is the beginning, that will then require an
updating of data, facts, and salient arguments all towards supporting and defending against attack, the critical legislation.

Hopefully will have a growing body of supporters who can infuse new energy into this missing movement.

I am a citizen activist in Vermont, responsible for initiating a movement for food sovereignty here. I run a weekly conference call amongst a scattered group of folks, in the U.S. and beyond, where parity has been advocated as part of an economic recovery program.

Anyways I thought I would reach out. Keep up your work!

Thanks,

Bruce Marshall

My intention was to show the loss of value in the dollar due to the debasement caused by monetizing the debt in terms of decreased purchasing power. I credit this, in addition to the interest on debt, as both being real causes of inflation.

My apologies for any confusion.

AFAIK, the price of raw materials always seeks fair expression in whatever passes for money at the time if not interfered with by monopolies and governments, true fair trade. My understanding is that the total amount of money in circulation cannot express a functional value greater that the total amount of raw materials, with and without value adding labor, in circulation.

That would be why, as you state,”debt is interest bearing and cannot be paid back.” Debt neither produces raw materials nor adds value, it can only contribute to inflation.

This would also be in total agreement, IMHO, with your statement that,”when raw materials are under priced, the only way to keep the economy going is to inject debt.”

The recent radical jump in raw materials prices has another inflationary cause but absolutely artificial and not unrelated to debasement and debt interest. That would be market speculation.

The manipulation of raw materials markets, both directly by the Dept. of Treasury and the Federal Reserve by spending monetized debt, and indirectly with policy supporting whatever it takes to pump the markets, appears as another inflationary engine to me. While this represents fictional valuations of raw materials it none the less profoundly contributes to current inflationary pressure.

Once again, sorry for any misunderstanding. I absolutely agree with your position.

If is no inflation here, why has

cotton gone up 300% in the last two years,
wheat nearly doubled in the last year,
oil started trading near $90,
oats more than doubled in the last year and
soybeans nearly doubled in the last year?

as a person who has studied and adhered to raw material economics for over thirty years, the examples of the raw material prices and their increase in prices is NOT the cause of inflation. Actually the underpricing of raw materials is the cause of inflation because as true raw material economic students know, when raw materials are underpriced, the only way to keep the economy going is to inject debt. And guess what, debt is interest bearing and cannot be paid back. The interest on debt is real cause of inflation.

The Rolling Stone asks:

Why Isn’t Wall Street in Jail? Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them

If you only read 2 things online this year, make this article 1 of them.