The Degrowth Demon and How the WEF's Anti-Development Agenda Is Leading to an Interest Rate Disaster
"Green" Elites would Rather Get You Laid Off than Pump More Oil
The Federal Reserve has now hiked rates to the point where things seem on the verge of breaking.1 Homeowners who have adjustable-rate mortgages or recently had to take out a mortgage are paying more than double the rate of interest on their mortgage than just a year ago.2 And credit card debt, already usurious, has gotten even more expensive,3 twisting the screws on what remaining resources Americans have.
Why is this happening? Inflation: the Fed is raising rates to try to push down the eye-popping inflation rate.4 Is raising rates the only solution? No, and focusing on supply factors instead would likely be better for the economy and make more sense.5
So why, if raising them makes everything more expensive for those who are indebted and could bring the economy to a crashing halt, are the powers that be raising rates at an extraordinary pace?6 Because they need to fight inflation to maintain legitimacy and raising rates is the only solution that allows “green”-obsessed elites to decrease the official CPI number without having to come to terms with the disastrous effects of their degrowth agenda.
NOTE: This is the second article in our inflation series. To read the first, check out this article on how the powers that be use CPI to lie about the real inflation rate. Our regularly scheduled series on Epstein and American foreign policy will soon resume, but we thought educating people on these topics was important given how “inflation” is shaping the Biden economy.
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What Is Inflation? The Calculation Behind the Budding Debt Disaster
If there is a structural flaw with the modern American “capitalist” system that is as ignored as it is insidious, it is debt. Based on usury, it is the financial instrument God Himself counseled against,7 yet it is at the root of every aspect of the American economy.
The Scale of America’s Debt Usage
Americans don’t pay with cash. They pay with credit cards. Often, that credit card balance turns into credit card debt.8 American companies, public and private, raise some money with equity financing (selling shares), but generally prefer debt financing (selling bonds).9 The American government no longer uses tax dollars to pay for its sundry line items; tax receipts make up only about 2/3 of its spending, and the remaining ~$1.5 trillion is put on the national credit card.10 In other words, our feckless “leaders” are using Treasury Bills, Notes, and Bonds to finance gender studies programs in Pakistan11 and defend Ukraine’s borders.12
Whether a sandwich shop or the Department of Defense, a customer at that sandwich shop or a defense contractor building bombs that’ll be dropped on Syrian Christians,13 debt is ubiquitous. It’s the grease on the axles of our system, the “tool” used so that American citizens,14 companies,15 and governments16 can buy now and pay later on everything from pizzas to nuclear-powered aircraft carriers.
It’s also a ticking time bomb, as the tentacles of usury have spread to every aspect of our economy and, now that they’re at risk of blowing up, are at risk of blowing up the economy too.17
How Our Massive Reliance on Debt and Rising Interest Rates are Leading to Economic Perdition
The “why” behind the developing debt crisis is inflation. Thanks to the profligate government spending that happened during and after the Scamdemic, trillions upon trillions of dollars were pumped into the economy.18 That money was “printed,” meaning the government took out debt to send out those stimulus checks and fraudulent PPE loans. Much of that money was soon spent, driving up prices. When paired with supply chain snarls, that led to the skyrocketing “Bidenflation” we’re now seeing.19
So, in an attempt to “pop” the inflation bubble, the Federal Reserve is precipitously raising its benchmark rate,22 which means the cost of all debt is going up. An example of that applicable to the average person is mortgages going from ~2% to ~8%.23 The other obvious example is the Treasury Bill rate jumping from nearly 0% to over 5%. Those rates are about the historical average,24 but the rate at which we reached them from nearly 0% is unprecedented, and the high cost of capital now compared to just a year or two ago is a massive change for companies, individuals, and the government. And make no mistake, rates are going to stay higher for longer,25 which means those with a mortgage won’t be able to escape the debt bubble by refinancing, and companies that need to issue debt will eventually have to do so at a large multiple of what it would have cost them just a year ago.
That, in turn, has turned the massive amount of pre-rate hike debt into a ticking time bomb. As it matures, those companies and individuals that need to take out new debt will have to do so at exorbitantly higher rates, thus forcing them into bankruptcy, penury, or at least straightened financial circumstances. Those factors mean that the economy dances on a knife’s edge, as consumer spending could tank when individuals run out of what cash and affordable credit they have,26 defaulted mortgages could mean a housing firesale,27 commercial real estate will sell at rock-bottom prices,28 and corporations will have to resort to mass layoffs to afford the new cost of debt.29
So, if the economy will crater thanks to interest rate hikes, why is the Federal Reserve ratcheting them up? Because it wants the economy to crater.30 That will mean a decrease in demand, which will, in turn, mean a decrease in inflation.31
You see, inflation is effectively a combination of two things: demand and supply.32 When one outpaces the other, prices tend to rise. That rise is in inflation. The Federal Reserve, which theoretically is meant to keep the currency's value stable but has, in reality, inflated it about 96% away since its creation in 1913,33 has chosen to focus on the “demand” side of the equation.34 It wants to push prices down, or at least stop them from rapidly increasing. If it can limit demand, that will likely happen. Out of work Americans have less money to spend, after all, which means prices will fall.
Supply: The Other Side of the Equation that the Fed Is Ignoring
But why not focus on supply? Why would the Fed rather tank the economy and cause misery for millions of Americans than just encourage companies to pump more oil, make more shirts, sort out logistical issues, and, in doing so, increase supply to match demand? Wouldn’t that be better, as it would grow the economy, create new jobs in well-paying fields, and avoid the general misery of a debt meltdown-induced depression? The Center for American Progress thinks so, writing:35
The current price inflation comes from multiple sources, but the Federal Reserve Board has only the blunt tool of demand reduction to deal with it. The Fed has begun raising interest rates to reduce demand for goods, services, and labor. If rates are raised enough, output and employment will be reduced, price and money wages changes will slow, and, eventually, core price inflation will be reduced. However, the Fed’s attempt to reach its 2 percent inflation target could produce a very large reduction in demand, leading to big losses in output and employment.
In these circumstances, it makes sense to explore ways to address the supply disruptions that are affecting the current expansion and may constrain growth in the future. Fortunately, the Biden administration has taken several steps to resolve supply problems. It has made a major effort to reduce the transportation bottlenecks at West Coast ports, the primary destination for containerized shipments from Asia. Moreover, it is releasing crude oil from the Strategic Petroleum Reserve (SPR) to counter crude price increases and is entering into forward contracts to refill the SPR to encourage increased domestic shale oil production. Recently the U.S. Department of Commerce released a strategy for a $50 billion semiconductor investment, funded by the CHIPS and Science Act, designed to increase domestic production of both advanced and mature semiconductors.
The current inflation owes a lot to supply conditions that have been anything but normal. COVID-19 has thoroughly disrupted manufacturing and reduced labor supply. Crude oil markets have been strongly affected by OPEC’s 2020 decision to lower production. Food supplies have been hit both by Russia’s invasion of Ukraine and by extreme weather. Moreover, corporations with market power have exercised it freely during the recovery.
These supply problems are unlikely to resolve themselves quickly or completely. COVID-19 continues to disrupt markets for labor, products, and services. OPEC continues to have a dominant role setting world crude oil prices. Climate change continues to produce extreme weather. And domestic corporations continue to exercise monopoly power whenever they see the chance.
This changed economic landscape calls for a broader approach to inflation policy. Relying exclusively on Fed demand management is far too passive. Things will greatly improve if economic policy addresses the supply issues brought into high relief during this recovery. The policy measures discussed above provide a reasonable starting point. Adopting them will relax the inflation constraint on output and employment growth. Moreover, they will provide important benefits to public health, families, and climate. There is much to be gained from a change in approach.
In other words, the supply side of the equation is part of the inflation problem, so shouldn’t the Federal Reserve and its Chairman, Jay Powell, focus on it rather than just ratcheting up rates until the economy implodes?
Yes, but that would run afoul of the “Green” degrowth agenda, and so it’s something the Swamp will countenance. They’d rather see a burst in deaths of despair than a return to the pre-Biden halcyon days of strong shale production and increasing supply, as an increase in the supply of oil means more “emissions.”
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The Degrowth Demon is the Impulse Behind the Decision-making of the Globalist Elites
Why won’t Powell and Co. focus on increasing supply instead of decreasing demand to fight inflation? Because that would run afoul of the current piety of the Davos crowd, “degrowth” economics. “Degrowth” is the idea that the economy needs to shrink, not expand, to fight “climate change.” Here’s how the infamous World Economic Forum describes regrowth (emphasis added):36
Degrowth broadly means shrinking rather than growing economies, so we use less of the world’s energy and resources and put wellbeing ahead of profit.
The idea is that by pursuing degrowth policies, economies can help themselves, their citizens and the planet by becoming more sustainable.
Practical degrowth actions might include buying less stuff, growing your own food and using empty houses instead of building new ones, the website Economics Help suggests.
Economic growth in society dates back to the 17th and 18th centuries, explains Our World in Data. That’s when technological innovation started driving increased prosperity.
Government policies have focused on growing and expanding economies ever since.
With increasing awareness about climate change, the degrowth debate has accelerated.
If economic growth continues to be the default goal, it will lead to climate catastrophe, the argument goes, with no hope of limiting global warming to 1.5 degrees.
It seems to be no coincidence that global warming caused by humans started around the 1830s, scientists believe, when the world’s first industrial revolution was at its height.
The solution is essentially to move away from the assumption that growth is good.
The Conversation quotes Sam Alexander, a degrowth advocate and research fellow at the Melbourne Sustainable Society Institute at the University of Melbourne in Australia. He says degrowth “doesn’t mean we are going to be living in caves with candles”. Instead, it might mean people in rich countries changing their diets, living in smaller houses and driving and travelling less.
The European Conservative, describing degrowth in less flattering terms, said (emphasis added):37
As envisioned by the project recently funded, it seems to mean assessing the quantity of natural resources available on a global level and then instituting a global rationing. It would possibly entail wide impositions by governments that will affect the day-to-day lives of ordinary citizens and equate to some form of restriction on basic civic freedoms as they are now enjoyed, such as movement, in which some will likely find themselves more restricted than others. Conservatives generally reject outright the idea of a globally controlled degrowth project, however, even some who do advocate for degrowth are now sending up alarms of undemocratic social engineering, cloaked as the good intention of preserving both man and nature.
In other words, degrowth is the idea that you should “own nothing and be happy.”38 It’s the idea that whatever standard of living you have grown accustomed to needs to decrease so that the world gets marginally less warm at some point in the future. It’s also the idea that many of the Western world’s ruling elites, as shown by the WEF’s promotion of it. The Europeans, particularly the EU, are very interested in “degrowth,” with it slowly taking over their policy planning.39
Powell, for his part, has insisted that his Federal Reserve remains focused on its statutory goals of stable prices and a stable labor market, not “green” policies. In a January of 2023 speech, he said, “It is essential that we stick to our statutory goals and authorities, and that we resist the temptation to broaden our scope to address other important social issues of the day.”40
He added, “Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals.”41
He reaffirmed that postion, saying, “We are not, and will not be, a ‘climate policymaker’.”42
But that is not all he has said. He also insisted that the Fed supervise banks to ensure they take into account “the financial risks of climate change.” What does that mean? Here’s how the European Parliament envisioned accounting for “climate risks”:43
On the policy front, for some years central banks and supervisors have started investigating the exposure of financial institutions and the financial system as a whole to such risks. Focusing on transition risks, the scientific literature provides an increasing number of studies assessing the financial impacts of climate transition risks, while transition risk is starting to be analysed also in relation to other environmental risks such as biodiversity loss and ecosystem degradation. Alessi and Battiston (2022) estimate the overall exposure of European investors to transition risk via their securities holdings at around 12 %. Even in the short run, financial dynamics could amplify an initially contained depreciation of high-carbon assets into a systemic crisis, all the more considering that fossil-fuel assets are riskier than comparable assets. To make the financial sector more resilient to these and other types of climate-related shocks, the European Commission is undertaking policy action, including asking the EU's banking, insurance and securities regulators to conduct a climate stress test of the entire financial system.
Powell also appeared on CNBC to say that America needs to start seeing growth “below its potential.”44 What is degrowth other than growth below an economy’s potential?
So, Powell could be on the side of degrowth or could just be incidentally promoting it by trying to crash the economy to fight inflation rather than trying to grow supply. It’s hard to tell, particularly given that he avows neutrality but is working firmly in one direction.
In any case, his personal views matter little. What matters is that the policy the Federal Reserve is pursuing is effectively one of degrowth, of shrinking the economy by doing its damndest to crush growth, in this case by using rapidly rising interest rates to crash the economy.
A central bank using its power to pursue a degrowth agenda isn’t out of the picture. A thesis paper from Cambridge University titled “Central Bank Objectives On The Axis of Growth-Degrowth Debates: Case Of The European Central Bank From A Human Rights Perspective” provides, in its abstract (emphasis added):45
This thesis focuses on the correlation between the secondary objectives of the European Central Bank (ECB) and the right to a healthy environment. Whereas the primary mandate of the ECB is to maintain price stability, the applicable law also envisages secondary objectives, such as supporting economic growth and sustainable development. In parallel, the ECB continues to support the fossil fuel industry within its quantitative easing and collateral frameworks.
Crucially, however, emerging degrowth theory indicates that there is a fundamental contradiction between the ECB’s secondary objectives, on the one hand, and sustainable development and economic growth on the other. In other words, environmental protection and economic growth cannot go hand in hand. This leaves the ECB with a legal dilemma. Should the ECB support environmental protection and sustainability, or economic growth? This thesis aims to analyse the given dilemma with a specific focus on legal implications in terms of the right to a healthy environment.
This study, ultimately, reveals the failure of the Member States to comply with the requirements of the right to a healthy environment in shaping the law of the ECB. This is because the legal frameworks underlying the ECB’s operation have been designed in a way that the overall monetary policy will ultimately contribute to economic growth, rather than supporting the transition to a sustainable economy. Indeed, it appears that the Union’s free-market economy and its governing law prioritize economic growth over sustainability. Thus, revisions to the legal frameworks would have structural limitations in realizing the right to a healthy environment
Whatever Powell’s intentions, working to crush demand and growth rather than increase supply is essentially the degrowth agenda as envisioned by the climate fanatics. Increasing the supply of cheap energy increases human flourishing.46 Restricting it leads to misery.
Though fighting inflation is important, Powell must also realize that the battle for supply growth is the battle for Western civilization. Cheap oil, natural gas, and electricity mean the world we have built can continue to exist. Degrowth, whether it decreases inflation or not, would destroy that world, particularly for those of limited means. It’s time for the Fed to change course in its fight against inflation and fight to increase supply, not crush demand.
As just one example, pumping more oil would create jobs and economic opportunity while also decreasing prices, whereas raising rates to crash the economy will probably decrease prices, but will also destroy jobs, lead to deaths of despair, and make America more reliant on warring, barbarous states.
It seems clear which decision a pro-human, pro-civilization Fed would make. It’s time for Powell to reject the degrowth demon and embrace a growth economy.