“Inflation and debt also affect the nature of power in a society. First, in an inflationary economy, it is not the thrifty, hard-working man who flourishes, but the debtor (at least, for the time). The moral foundations of society have been shifted to favor the worst element. In every area, as inflation is stepped up, the scum tends to rise to the top. The sympathies of society favor this degenerate element.
Second, production gives way to consumption as the primary concern of the people. Third, there is thus a power shift in society from godly men to ungodly men, from the thrifty to the thriftless. Spending becomes a personal and a political virtue.
Fourth, the power to make or break the social order passes into the hands of debtors. General Lewis W. Walt (USMC, Ret.) has called attention to this most tellingly. When the U.S. Establishment (banks, civil government, etc.) has extended massive loans to states, firms, and organizations at home and abroad whose ability to repay is limited, then in time these borrowers control the Establishment and the United States. They can threaten to default on their loans and create economic disaster for the U.S. The response then is to give them even more! Thus, in the 1940s, Aramco sold oil to the Japanese at a lower rate than to the U.S. Nay, and American bankers supported the Panama Canal giveaway, hoping that its revenues might help Panama to repay them.”
The Roots of Inflation, p.51
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