Price Discovery Illusion: Prices Are Meaningless on the Cusp of Hyperinflation
Constant flux is the status-quo in our lifetimes, and, in such a reality, adaptation is teased like a hungry predator in a city zoo. Overcoming the mounting odds against an individual in an environment always changing is akin to a domesticated zoo predator exacting victory over a power-craving zoo attendee who taunts from outside the cage.
As everything always changes – that is, as the bar is always raised – what is true and workable on Monday, might not be so on Tuesday. For us, true price discovery has been sacrificed on the altar of fiat devaluation and power consolidation. Or, rather, for entrenched families and institutions who must guarantee their own future power or risk judgment by history books, and not the authoring thereof, has true price discovery been sacrificed.
Everyday families, as they make their way to a local supermarket for food, cannot depend on the prices. The steak which was $8.00 a pound on Monday, might, on one Tuesday in the near future, be $12.00 or even $12,000. Hitherto this crossing, the prices will have been totally distorted, unrepresentative of future trends. Therefore, totally useless as a gage by which a family can determine their standard of living. As true price discovery has been eliminated in society by conscious state-enterprise policy, prices have become meaningless because people cannot depend on their expectations of those prices.
In other words, prices across the globe have become propaganda statements intended to convince populations that things are not as bad as they seem. The hyperinflation that must happen as a direct result of the oligarchy’s behavior is not around the corner, but is merely the intense and paranoid theories of individuals who over-analyze the dominant culture would like to believe.
Because individuals have short frames of reference when it comes to change over time, and the price discovery mechanism seems consistent in the short-term, prices remain perceived by many as stable due to the propaganda efforts of monetarists who depend on military supremacy to magick the reality they desire. But, in the long term, the whole mechanism is totally distorted and completely useless for us to know what anything is worth.
The minute a society starts printing, the whole mechanism is distorted. Supply and demand no longer determine the value of an item. Price discovery is completely reliant on how much fiat currency there is in circulation, and this fiat currency has no true value to offer the society except as something in which to believe. As the printing tips the balance of the economy via the handouts of over-abundant fiat, real stuff and things begin to disappear as a scramble away from the flood of fiat ensues. All major currencies, from the Federal Reserve Note to the Euro to the Yuan to the Swiss Franc, have become hot potatoes. The reasons for not holding these representations of modern wealth have reached quadrillions: that is, how much of these notes have come to exist in circulation or on a computer screen. There is not, and will not be in the relevant future, for example, quadrillions of ounces of silver.
Once a scramble away from the fiat currencies begins to overwhelm commodities markets, the demand then kicks up only to further distort the price discovery mechanism. For instance, let’s say as the price of cattle creeps up due to the increasingly positive supply of fiat currency and the consistent supply of cattle, so too does demand for said cattle as people and companies began to realize that saving in the fiat currency was not viable for the long term, as it was by nature of its supply becoming worth less-and-less relative to stuff and things, like cattle.
Then, the supply of cattle is no longer consistent, and so begins, year-by-year, a trend towards no cattle on the market yet increasing amounts of fiat currency in the market for those cattle. Price inflation in cattle then becomes exponential, the price spirals as there is a mania to buy up the world’s cattle, and the prices of those cattle in the prior inflationary episodes is rendered irrelevant, as it did not display the capacity for hyperinflation in the cattle market arisen from uber-liquidity and exponential demand.
Millions are priced out of a market that, perhaps for them and their families, was their survival. The number of notes available to the society in relation to the amount of stuff and things has grown exponentially, and has unleashed a closed system in which all bank accounts reach zero balance no matter what follows the $ at the beginning of the statement as there is simply nothing left to buy. The new card game of children will be trading extinct fiat currencies for fiat currencies as their parents realize there will never be any collector’s value in the obsolete U.S. Dollar.
As the price discovery mechanism becomes useless, prices become unpredictable. Anything could happen in a tempest of fiat command-and-controlism. In the precious metals sphere, for example, that gold is more expensive than platinum, is a sign that the whole mechanism is totally distorted, considering how much rarer platinum is than gold.
Prices in the modern age are not reliant on supply-and-demand. This is an old paradigm in the context of state-enterprise managed economics. The economy depends on how much paper has been coughed into it by financial technocrats and the manager of the global economy. Supply and demand cannot be gauged in fiat oblivion, and price discovery is a play conjured by the establishment, and they are sure to conjure an illusion so as to keep the people in the dark.