ANALYSIS<\/b>
Everyone in Australia right now feels like something\u2019s off.<\/p>\n
You\u2019re working, you\u2019re earning, on paper the economy looks \u201cokay\u201d \u2026 but everything feels harder. Groceries, insurance, rent, mortgages \u2013 it all just keeps creeping higher.<\/p>\n
And then you hear the explanations. Supply chains, global shocks, wages.<\/p>\n
But none of that really explains why it feels persistent. Why it doesn\u2019t go away.<\/p>\n
Because the real issue isn\u2019t one-off shocks.<\/p>\n
It\u2019s the system.<\/p>\n
<\/p>\n
Over the last few years, Australia hasn\u2019t just grown \u2013 it\u2019s been propped up.<\/p>\n
Governments stepped in during Covid and spent aggressively, and fair enough at the time. But the key point is \u2013 they never really stopped.<\/p>\n
Spending kept rising. Programs expanded. Debt kept building.<\/p>\n
State debt is on track to approach $900 billion in the next few years. Total public debt is pushing past $1 trillion. And we\u2019re now spending tens of billions every year just servicing that debt.<\/p>\n
And that matters, because governments don\u2019t have a vault of money sitting somewhere.<\/p>\n
They borrow it.<\/p>\n
And when they borrow, the banking system creates credit. And when credit is created, new money enters the economy.<\/p>\n
So every time spending ramps up, the amount of money in the system increases.<\/p>\n
Quietly, but relentlessly.<\/p>\n
Now, at the same time, look at where the economy is actually growing.<\/p>\n
Since 2023, we\u2019ve created around 926,000 jobs. Sounds like a strong labour market.<\/p>\n
But nearly 70 per cent of those jobs are in government-funded sectors \u2013 health, education, public administration.<\/p>\n
Those sectors are important, no question. But they don\u2019t behave like the private sector.<\/p>\n
They don\u2019t generate exports. They don\u2019t compete globally. And critically \u2013 they don\u2019t drive productivity in the same way.<\/p>\n
And here\u2019s the imbalance. Government-funded jobs are about 30 per cent of the workforce, and yet they\u2019re producing the vast majority of job growth.<\/p>\n
So what you\u2019ve really got is this: an economy where growth is increasingly driven by government spending \u2013 not private sector expansion.<\/p>\n
Which means that growth has to be continuously funded.<\/p>\n
More spending. More taxing. More borrowing. More credit creation. And that means more money creation.<\/p>\n
Now here\u2019s the key point \u2013 the one that actually explains why everything feels more expensive.<\/p>\n
If you increase the amount of money in the system, but you don\u2019t increase the amount of real output at the same pace, each dollar buys less.<\/p>\n
Not because companies suddenly got greedy.<\/p>\n
Not because supply chains broke forever.<\/p>\n
But because the unit you\u2019re measuring everything in \u2013 the dollar \u2013 is being diluted.<\/p>\n
That\u2019s inflation.<\/p>\n
And here\u2019s where most people get lost.<\/p>\n
Because they look at Consumer Price Index (CPI) and think that\u2019s the whole story.<\/p>\n
But inflation doesn\u2019t show up evenly, all at once.<\/p>\n
New money enters the system in specific places first.<\/p>\n
It flows into housing. Into financial assets. It flows into anything that holds value and can\u2019t be easily created.<\/p>\n
And only later does it spread through the rest of the economy \u2013 into everyday prices.<\/p>\n
So if you want to see what\u2019s really happening, you don\u2019t start with CPI.<\/p>\n
You look at the early signals.<\/p>\n
And this is where gold and silver come in.<\/p>\n
Not as investments. Not as speculation.<\/p>\n
As measuring tools.<\/p>\n
Because unlike dollars, they can\u2019t be created by a bank or a government.<\/p>\n
They just sit there.<\/p>\n
So when you see gold move from around $3000 to over $7000 an ounce in Australian dollars and silver triple \u2013 that\u2019s not telling you something changed about gold.<\/p>\n
It\u2019s telling you something changed about the dollar.<\/p>\n
It now takes more dollars to buy the same ounce.<\/p>\n
That\u2019s the system revealing itself.<\/p>\n
And when you connect that back to what\u2019s happening here, it lines up perfectly.<\/p>\n
We expanded government spending.<\/p>\n
We expanded debt.<\/p>\n
We expanded credit.<\/p>\n
We expanded the money supply.<\/p>\n
At the same time, we shifted job growth toward sectors that don\u2019t lift productivity.<\/p>\n
So you\u2019ve got more money chasing less real improvement in output.<\/p>\n
That gap is inflation.<\/p>\n
And then we get to the final act.<\/p>\n
Interest rates.<\/p>\n
People ask \u2013 why are rates still high?<\/p>\n
Because once that money is in the system, the only way to deal with it is to slow it down.<\/p>\n
Higher rates reduce borrowing.<\/p>\n
They reduce credit creation.<\/p>\n
They try to take pressure off prices.<\/p>\n
But by then, the money is already out there.<\/p>\n
So when people say inflation is coming down, they may be right. <\/p>\n
But the structure that created it is still there.<\/p>\n