Spain's Inflation Debate: Who Really Sets Prices?
In Spain, a shopping basket costing €30 in 1990 now requires €250. This fuels debate on whether inflation is natural or a designed mechanism.
English · Original discussion in Spanish · Published
Inflation isn't a natural force: someone manually raises prices
A liter of oil that cost €1.50 suddenly appears at €5. The shopping basket that filled for €30 in 1990 now demands €250, according to a circulating calculation. Yet official inflation data barely moves 2%, per the critical view. This contradiction, which any consumer detects at the supermarket checkout, starts an analysis arguing inflation isn't a natural phenomenon or physical law, but a mechanism designed to prevent saving and perpetuate debt. Central thesis: if money held stable value and prices didn't rise endlessly, workers could save, stop depending on wages, or start businesses. Constant inflation prevents this.
Official calculations don't match the shopping basket
The repeated argument is that official inflation measurement doesn't reflect what citizens pay. Statistics allegedly select an arbitrary basket of goods—secondary products, minority consumption—while excluding skyrocketing items. Housing prices, multiplied by twenty since 1980, aren't included. Neither is purchasing power loss from the euro changeover, applied at 166 pesetas when the set rate was that, though practically rounded to 100, cutting buying power.
The result is a gap everyone perceives: filling the cart with same products as 1990, costing €30 then, now requires at least €250, per circulating estimates. Housing completes the picture. A generation bought four new apartments in ten years; now two salaries and over forty years of mortgage are needed for one fourth-hand apartment built back then.
Why do prices rise while consumption falls?
The question disrupting conventional narrative: if supply and demand set prices, how can they rise as consumption weakens? The analysis answers that markets don't set prices; those controlling production do. Oligopolies fix convenient prices while consumers pay without alternatives. Olive oil is the recurring example: a five-liter jug at €42 while olives pay farmers cents.
Some go further, arguing productive economies' natural state is deflation, not inflation. Productivity, efficiency, and technology improvements should lower goods' costs over time. If prices rise instead of falling, it's because someone captures that productivity gain and imposes a 3% annual impoverishment target.
Gold, Bitcoin, and digital currency traps
Discussion shifts to alternatives. One current defends gold or silver standards as intrinsically valuable money, unable to be devalued by decree. Another notes Bitcoin acts as Trojan horse for central bank digital currencies, turning money into direct social control tools. Silver, history recalls, functioned as money longer than gold.
Technical counterarguments appear too: How assign fixed constant value to fiat money? With state price tables? Putting officials in charge of central banks? Objection: none solve root problems, because pricing power doesn't vanish, just changes hands.
Debt, deficit, and housing trap
Full mechanism, per this reading, combines three pieces: inflation, deficit, and debt. With all three zero, many problems vanish; with all three high, they become looting tools. Housing is master piece: essential good at prohibitive price forcing lifelong debt. Pay religiously monthly or lose everything, even after amortizing 90%.
Some nuance that problem isn't liberalism itself, but some actors simultaneously controlling finance, media, and production, allowing them to crush competition. In rental markets, regulatory pressure expels small owners, funds buy cheap, then laws change to guarantee new owner legal security.
Discussion remains open. Some see inflation as deliberate invention keeping population indebted and unable to save. Others admit diagnosis but disagree on remedy: gold standard, continental currency, natural deflation, or simply raising wages. No one disputes that 1990's shopping basket and today's don't cost same. What if problem isn't how inflation is measured, but who decides what gets measured?
A liter of oil that cost €1.50 suddenly appears at €5. The shopping basket that filled for €30 in 1990 now demands €250, according to a circulating calculation. Yet official inflation data barely moves 2%, per the critical view. This contradiction, which any consumer detects at the supermarket checkout, starts an analysis arguing inflation isn't a natural phenomenon or physical law, but a mechanism designed to prevent saving and perpetuate debt. Central thesis: if money held stable value and prices didn't rise endlessly, workers could save, stop depending on wages, or start businesses. Constant inflation prevents this.
Official calculations don't match the shopping basket
The repeated argument is that official inflation measurement doesn't reflect what citizens pay. Statistics allegedly select an arbitrary basket of goods—secondary products, minority consumption—while excluding skyrocketing items. Housing prices, multiplied by twenty since 1980, aren't included. Neither is purchasing power loss from the euro changeover, applied at 166 pesetas when the set rate was that, though practically rounded to 100, cutting buying power.
The result is a gap everyone perceives: filling the cart with same products as 1990, costing €30 then, now requires at least €250, per circulating estimates. Housing completes the picture. A generation bought four new apartments in ten years; now two salaries and over forty years of mortgage are needed for one fourth-hand apartment built back then.
Why do prices rise while consumption falls?
The question disrupting conventional narrative: if supply and demand set prices, how can they rise as consumption weakens? The analysis answers that markets don't set prices; those controlling production do. Oligopolies fix convenient prices while consumers pay without alternatives. Olive oil is the recurring example: a five-liter jug at €42 while olives pay farmers cents.
Some go further, arguing productive economies' natural state is deflation, not inflation. Productivity, efficiency, and technology improvements should lower goods' costs over time. If prices rise instead of falling, it's because someone captures that productivity gain and imposes a 3% annual impoverishment target.
Gold, Bitcoin, and digital currency traps
Discussion shifts to alternatives. One current defends gold or silver standards as intrinsically valuable money, unable to be devalued by decree. Another notes Bitcoin acts as Trojan horse for central bank digital currencies, turning money into direct social control tools. Silver, history recalls, functioned as money longer than gold.
Technical counterarguments appear too: How assign fixed constant value to fiat money? With state price tables? Putting officials in charge of central banks? Objection: none solve root problems, because pricing power doesn't vanish, just changes hands.
Debt, deficit, and housing trap
Full mechanism, per this reading, combines three pieces: inflation, deficit, and debt. With all three zero, many problems vanish; with all three high, they become looting tools. Housing is master piece: essential good at prohibitive price forcing lifelong debt. Pay religiously monthly or lose everything, even after amortizing 90%.
Some nuance that problem isn't liberalism itself, but some actors simultaneously controlling finance, media, and production, allowing them to crush competition. In rental markets, regulatory pressure expels small owners, funds buy cheap, then laws change to guarantee new owner legal security.
Discussion remains open. Some see inflation as deliberate invention keeping population indebted and unable to save. Others admit diagnosis but disagree on remedy: gold standard, continental currency, natural deflation, or simply raising wages. No one disputes that 1990's shopping basket and today's don't cost same. What if problem isn't how inflation is measured, but who decides what gets measured?
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (107 replies).
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