by Antonius Aquinas,Antonius Aquinas:

President Donald Trump’s decision to join Israel in its war of aggression on Iran has not only failed to achieve its political aim, but for the United States and the world economies, the financial fall out has been a disaster, which, if conditions continue, will only intensify.

Although the United States is a net exporter of oil and natural gas, restrictions on Persian Gulf energy flows will still negatively impact the American economy.

According to aBusiness Insiderarticle by Jennifer Sor, Goldman Sachs projects that if the Strait of Hormuz remains closed and energy flows do not return to prewar levels, higher oil prices could result in the loss of approximately 10,000 U.S. jobs per month, pushing the unemployment rate to 4.6% by the end of the year. *

TRUTH LIVES on athttps://sgtreport.tv/

In addition to job losses, the reduction of Persian Gulf energy will also mean an uptick in “inflation,” squeezing consumers. “Higher oil prices,” Sor reports, “could push up the prices of other goods and raise inflation – but the fallout could extend much further, given that consumers are likely to pull back spending in other areas, hurting growth and potentially causing hiring to slow.”

Goldman Sachs, along with much of the financial press, academia, and many among the alternative media, misunderstands what inflation actually is. This discredits their analysis. Whether this is intentional to mislead or stupidity is hard to say.

Properly understood, inflation is an increase in the money supply; the rise in prices is theresultof inflation – money printing. Thus, higher oil prices due to supply shocks do not cause overall price increases, even though energy is a critical component of production.

Under a stable money supply – such as a gold standard – an exogenous price shock in oil would not raise the general price level. Instead, higher spending on energy would simply mean less money available for other goods and services (home remodeling, dining out, clothing, etc.). This would result in a redistribution of spending toward the energy sector and a reduction of income allotted to other goods – the overall price level would not increase.

The rise in overall prices results from the Federal Reserve’s continuous expansion of the money supply primarily to finance massive government spending through debt monetization. Policymakers have long blamed oil price shocks for rising prices since it diverts attention away from the real culprit: money printing.

Source: SGT Report