Power & Market

One Expensive Christmas

This Christmas, try to remember there’s poverty and then there’s “poverty.” In America millions of people have fallen on hard times as their savings continue to erode due to the government intervention and central bank currency inflation of late. This devastation is sobering, while other countries in the world whose socialism is “more advanced” than America’s face poverty that is difficult to fathom by our standards.

The Zimbabwe Independent tells us about Christmas on the other side of world:

Locals are battling debilitating power cuts of up to 19 hours daily… Poverty levels are deepening and incomes have been eroded…. Foreign currency shortages are deepening and the volatilities that have ravaged the currency for decades are continuing…

As for the festive holiday:

Most Zimbabweans will not have electricity to cook the family Christmas lunches, unless they grudgingly use firewood or gas.

Imagine your average American not having power for up to 19 hours a day, or seeing the purchasing power of their currency decline so much that they must rely on a foreign currency?

A screenshot of Zimbabwe’s M1 money supply would tell the story, but no need to share as readers are capable of surmising its exponential growth over the last few years.

Then there is Canada, a country much like America but further “advanced” in its socialism; it’s a nation where concepts like “liberty”’ and “freedom” have never woven themselves into the fabric of the nation nor been ingrained in the population. According to Canada’s government owned news channel, the CBC:

Even the price of Christmas trees is up this year, to the tune of 10 per cent, amid a nationwide shortage and higher farming and fuel costs.

According to Canada’s annual food price report, “a typical family will see its food bill climb over $1,000 next year.” In response to this:

…the Bank of Canada raised its key interest rate for the seventh time this year in the fight against inflation — now sitting at 4.25 per cent, its highest point since 2008. 

Meanwhile, in America, Christmas isn’t normal either. CBSNews tells us:

Christmas tree prices had been expected to increase between 5% and 15% this year compared to last year… key holiday dinner items such as turkey, baking products and dairy are up between 15 and 25%.

This holiday season, take just a few moments to consider the lengths governments and central bankers across the world have gone to completely decimate their respective countries. One can bet that across the globe, this will be a Christmas to remember.

Making matters worse, there is no promise of a better next year since the response to the problem remains: central banks increase the money supply, prices go up, and market distortion occurs. Central banks raise rates. Why they continue to look at rates when they should be looking at the money printer is anyone’s guess. And while it’s unclear what the end game is to all of this, if the powers that be want America to look more like Canada initially, and Zimbabwe later, they are taking the right steps.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. 

Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Become a Member
Mises Institute