[GJM] INSTANT ELECTRONIC INFLATION TAXATION AND PRICE SUBSIDY INCENTIVES IN TRANSFINANCIAL ECONOMICS (FEB 2008)

[Steve Consilvio]

Robert, isn't the problem you are trying to fix the occurrence of  
spikes in prices?  While we think of inflation as a generic singular  
event, in reality it is occurring separately and individually on each  
good.  As such, wouldn't the easier solution be to remove the spikes  
by setting a uniform standard, instead?

For example, let's assume everything that is sold has a fixed mark-up  
of 1%.  As the product moves from hand to hand from raw material to  
finished good on the retailer shelf, if everybody uses the same mark- 
up, then the possibility of spikes occurring is moot.  The selling  
price is always pre-determined by the purchase price.  The good will  
cost the same proportionately and relatively to every other good  
FOREVER.  As advancements are made in production capacity, etc., the  
price should drop.  If businesses are inefficient, they would still  
be selling based on cost, rather than the mythical "marketplace forces."

The problem we have now, besides the occurrence of price spikes, is  
also that any gains from machinery are lost as well to the nature of  
compounding profit margins, which are mirrored by compounding  
losses.  The same product is sold at different prices to different  
customers by the same company, for example, giving some players a  
distinct advantage.  This is done because of the concept of  
competition, but we do not need a "competitive" marketplace, we  
simply need one that works.

I don't know if I am being as clear as I would like.  I think you  
would agree that PURCHASING POWER is a fallacy when inflation is  
altering the cost of the goods constantly.  Also, it is imperative  
that not only the price of goods be under a standard mark-up, but  
also the price of land.  Land inflation will inevitably lead to  
product inflation.

To give a real world example, I lowered my prices on t-shirts today.   
http://www.squeegeegraphics.com/home/tshirts.html I could just have  
easily raided them.  Nobody would know the difference.  But had  
Bernanke said yesterday, "Hey everybody, cut your profit margins,"  
then he would have done some good.  Instead, he is telling people to  
be afraid of inflation before it even occurs.  He is REACTING AND  
PREDICTING when what he should be doing is INSTRUCTING.  As the owner  
of a business, it is my job to LEAD, which means that I must have 1)  
principles, 2) standards and 3) instructions for others.  Thus, there  
are three ways (at least) to be in error.  So I would suggest the  
following:

1. Principle: Inflation is caused by individuals "marking-up" the  
price of goods (buy low, sell high)
2. Standard: The lower the mark-up number, the better for everyone.   
Zero is the best number, but 1% would be manageable.  Currently, the  
average number is 50%.  I set my shirts at 30%, which I could only do  
because I have low overhead.  (It took me 20 years to figure that  
out, unfortunately.)
3. Instructions: There's the rub, eh?  In a free market, everybody  
does what they want, and Pangloss says that it is "the best of all  
possible worlds," no matter what horrors are occurring.  However, if  
we had good principles and standards, then instructions wouldn't be  
very hard to accept.  As it stands today, what most people teach as  
"financial literacy" is the abandonment of #1 & #2, and encourages  
greater profits and land and value manipulations.

It really isn't so hard to say "Hey everybody, decrease your profit  
margins!" but getting people to understand why it is important is  
difficult, since we have all been indoctrinated to believe the  
opposite, and our fear of inflation leads us to create more of what  
we fear.  Nevertheless, "Less is More."

It is also worth noting that the more hands that touch a product,  
then the more the product will cost.  This is why vertical companies  
seem to have a competitive advantage, but eventually the math catches  
up with them, too, since they also have a larger overhead to  
maintain.  Any bump in their sales causes a domino effect, and the  
fear embedded in large organizations causes them to both hoard wealth  
and to try to maximize profits. Both strategies come back to haunt  
them, as we can see with the wild swings in the auto industry.

Nobody can outrun their own inflation, which is why we must  
understand the obvious and simple origin of inflation, (I create it,  
since I set the prices,) and popularize a standard that lower mark- 
ups lead to a healthier economy.  Everyone needs to be re-educated to  
recognize principles, standards and instructions.  We are now  
instructing children to invest and manipulate money (see this years  
SuperBowl commercial,) so the calamitous effects are inevitable.   
Once we make children into pigeons in this insane ponzi scheme, I  
assume we have met the end of the road, for America at least.  There  
are plenty more other countries that seem to want to copy our  
failures.  Looks like North Korea will be next.

peace,
steve


On WednesdayFeb 27, 2008, at 2:00 PM, discussion- 
request at globaljusticemovement.net wrote:

>   What I have been presenting are just rough draft
> ideas for the successful control of inflation levels.
> In this case we will touch on Inflation "Taxation".
> Note the word Taxation in brackets. What we are
> dealing with here is not an instant elecdtronic
> deduction of the AMOUNT of money in real terms but
> rather its PURCHASING POWER.

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