Inflation isn’t a scary word, is it? It makes you think of blowing up balloons for birthday parties, the Macy’s Thanksgiving parade, maybe helping a toddler get their water wings on before an adventure in the swimming pool. It just sounds so innocuous.
Even so, in an economic sense, inflation is the deadliest danger we face today. Recently it’s been all over the news, so I’m sure you’re aware of it. Even if you don’t watch the news you’ve seen your trips to the grocery store become noticeably more expensive over the last year.
Today I’d like to share with you an important way to view the monetary phenomenon called inflation, and help you understand exactly how it’s stealing your very future…
A cornerstone of civilization
I’m going to quote myself here: “Stable money is a cornerstone of civilization.”
Let me explain: in order to plan for the future, you must know what your money will buy in the future. In order for businesses to decide whether to, say, make a big investment in constructing a new factory, they have to forecast up-front expenses and future profits.
In order to simply make a transaction, you have to know the value of your money won’t radically change while you’re handing it over.
Without stable money, households can’t plan for the future. Businesses can’t expand. Buyers and sellers lack the necessary trust to simply complete a transaction.
Now, throughout most of American (and world) history, stable money meant physical gold or silver coins. And when paper was traded, that paper was a claim on either gold or silver. You could walk up to a bank and present your paper and demand “cold hard cash” and they’d have to hand it over.
Now, this is a great way to deliver money with stable purchasing power over time. As Michael D. Bordo tells us:
Between 1880 and 1914, the period when the United States was on the “classical gold standard,” inflation averaged only 0.1 percent per year.
Now, this is fantastic for households and for businesses. Can you guess who it’s terrible for?
Governments. The entire continent of Europe effectively abandoned the gold standard during World War I, then again during World War II so they could print money to finance their armies. The U.S. eventually followed suit in 1972, when President Nixon told Americans their money was no longer exchangeable for gold or silver.
In other words, the U.S. went to a “fiat” currency system:
The term “fiat” is derived from the Latin “fieri,” meaning an arbitrary act or decree.
In other words, a dollar has value because the government said so.
This reminds me of something President Herbert Hoover once told Franklin D. Roosevelt:
We have gold because we cannot trust governments.
When gold was money, it was easy to know how much a government could spend. All you had to do was add up the dollars in circulation and compare it to the government’s gold reserve. That’s it. Simple math.
Once we left the gold standard and entered the age of “it’s money because I said so,” we also entered the age of unconstrained government spending.
Does that sound harsh? Let me show you a chart, comparing the quantity of U.S. debt from 1972 to today:
Since the end of the gold standard, U.S. national debt has increased almost 70-fold.
Meanwhile, the purchasing power of each individual dollar is about 1/7th what it was in 1972.
That’s because, every time the government prints new money, it doesn’t make wealth. Only hard work creates wealth! Every single new dollar that rolls off the printing press reduces the value of every other dollar in the world.
“Theft” is not too strong a word
Imagine the government passed an executive order overnight that confiscated 8.5% of your money in the bank. In your retirement accounts. In your wallet.
What would you do? How would you feel?
I’m pretty sure I know exactly how you’d feel – like you’d been robbed! You’d feel like the people in power had decided to abuse that power. You’d be angry. You might engage in acts of civil disobedience, perhaps even uncivil disobedience. Whatever you did, you’d do something. Such an astonishing overreach of government power, such an incredible abuse of your personal property, it’s not something any red-blooded American would take laying down. We’d figure out a way to put a stop to it.
Now, what if exactly the same thing happened, but without changing the balance in your bank account?
Would you even notice?
The truth is, most people watch their balance much more closely than they watch the value of their money. If the balance goes down, it’s easy to see! If the value of your dollars, if your purchasing power decreases, you’re unlikely to notice right away.
Now, here’s what I want you to understand:
This is exactly what the Federal Reserve has done. They have robbed you of the value of your money, even if they didn’t affect the balance of your money.
It might not be polite to say, but I firmly believe theft is not too strong a word to describe the effects of inflation on you and your family. I firmly believe that inflation, the ongoing destruction of your hard-earned savings, is the greatest economic threat we face today.
Protecting yourself from value destruction
Like I mentioned above, most Americans simply aren’t paying attention to the value of their money. So long as the balance isn’t going down, they think they’re doing just fine. But they’re not.
They’re being pickpocketed, every single day. By the Federal Reserve. By a government that thinks we can spend our way to prosperity by printing even more money.
Now, if you’re an American with the relatively modest goal of merely keeping your money safe, there just aren’t very many options for you. Whether you’re trying to plan for your future, or want to leave a legacy of lasting value to your heirs, it’s harder today than it’s ever been.
That’s why I’m excited to work with Birch Gold Group. These folks make it easy to take your retirement savings and use those dollars to buy real physical gold – the most stable form of money I know. It’s not a promise to pay. Gold’s value isn’t based on anyone’s say-so.
Please understand, I’m not telling you to buy gold. I would not presume to tell you what to do with your hard-earned money. Instead, I’m here to encourage you to educate yourself, especially about how you can convert money you’ve already saved into physical precious metals.
Birch Gold Group publishes a free info kit to help you determine whether diversifying your savings with gold and silver is right for you. Please, take a moment and request your free info kit right now.
Because the longer you wait, the less gold your dollars are likely to get you…
After 8 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.
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That “right wing nutter” has yet to be wrong about anything he weighed in on.
No wonder Leviathan hates him and his equally correct whelp so much.
When the left hates you, you are never wrong.
(I claim that axiom as my own!!)
More Paid Content, just like Google and NYT gives us!
Inflation is the wrong word and I believe a willful choice. Deflation of the value of the Petro Schekel is the more correct term for what has been happening since 1913. When the Petro Schekel is also the world reserve currency and it’s value is willfully debased it behaves like a WORLD TAX. This has permitted us in America and the true owners of America The Schekel Shysters to live our obscene lifestyles at the expense of the rest of the world.
Now those same Shysters are in the process of throwing us under the bus and sticking our progeny with the bill.
The big lie here is that it will take years to replace the Petro Schekel. And pigs can now fly too. The groundwork has been carefully laid for this “sudden event” for 40 years now.
Andy is one of the sharpest knives in the drawer and he explains how it will happen suddenly. A very informative and entertaining 1 hour.
Two short notes in the inflation subject.
1.
“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. Lenin was certainly right.
2.
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” Keynes
ALAN GREENSPAN Quotes about “Gold”
● “The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
● “Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.”
● “Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”
● “An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense… that gold and economic freedom are inseparable.”
“Fiat money in extremis is accepted by nobody. Gold is always accepted.”
We hope. Gold is almost always accepted. Here’s to hoping we never encounter those situations in which even gold is useless.
“It’s Time to Call “Inflation” By Its Real Name: Theft” and “”“Theft” is not too strong a word” I admit after reading the title and sub heading I just skimmed the article. Now is the time? This BS has been going on for over a hundred years and now is the time. Do you really have to justify the article by claiming “theft is not to strong a word?” I’m living in crazy town. That’s like being hog tied and watching a burglar loot your home then going in front of a judge and saying “your honor, I hate to say it but this person is a thief.” PLEASE. They have looted us our entire lives thereby stealing our time through inflation, resulting in stolen life. Imagine having a standard of living 5x greater than what you have now and you might begin to understand what was stolen from you. Before you ask how I arrived at that figure I consider that conservative and do your own research.
I would just like to add the dollar is worth less than a nickel of what it was prior to the creation of the FRB. Does that mean our standard of living is 1/20 of what it should be? You decide.
You have No Idea what this inflation Genie is doing and will do.
Rule 72… please look it up !
The Worlds Central Banks have blown 22 years of the unregulated free money with the Greenspan/Bernanke Put.
They have blown the Bubble of all Bubbles and painted themselves into a Corner, Cant raise much, nor can they simulate with lower cost free money.
Inflation will steal everything you thought safe, slowly slowly you will have less to spend and less collateral in overpriced assets.
They have made us all poor and even property will be raped and then on top, taxed by inflation charges.
The recession started in 2008, when they printed and made all asset prices rise year on year to ludicrous figures.
They cannot contain prices now, as it is a circular, inflationary spiral because they printed way more than needed.
My advice ….. learn to live simply because you will be
Inflating the currency is an economic penalty which is thrust upon those who dont receive any of the newly minted counterfeit money. Conversely, it is both a relief from that penalty and an illegitimate economic gain to those who receive the counterfeit loot.
When it comes to (monetary) inflation average working people just don’t understand what exactly is going on when the value of their hard earned dollars get depreciated & devalued. Yes, they recognize prices are rising and get angry & frustrated, but that’s the extent of it. They don’t know why prices are rising and they don’t know what is going on behind the scenes which is the cause of their alarm.
This malicious & ongoing crime doesn’t just happen by mistake. It’s not some natural occurrence found in nature and it doesn’t happen because of bad luck or happenstance. It doesn’t occur because of some random disaster like getting cancer or crashing your car. No, this is an intentional process caused by a certain group of people. It is a man made phenomenon & a crime against society. It is a deliberate process and you are intentionally being robbed & stolen from by people working for our own govt. Since the problem was created by men it can be fixed by men. But it wont, and the thievery will continue on indefinitely, year after year. As long as they can get away with it they will continue doing it.
Now if that weren’t bad enough it gets even worse. When govts counterfeit money they don’t just take it and throw it in a dumpster, and it doesn’t just disappear into thin air. No, the new money gets spent & dispersed somewhere. And where is that you ask? I’ll bet you already know. You’re right, it goes to other people. And most of it goes to those who do not legitimately earn it by hard work & honest effort by producing a product or service which society values . So not only are you hurt by higher prices for the things you toil for, but the value of the money being stolen is transferred to those on the receiving end who unjustly benefit from it. They now enjoy a standard of living which is much higher than they ordinarily would have achieved on their own thanks to the govt counterfeiters. The recipients of those inflated dollars are living high on the hog and are profiting at your expense while you have to scratch & save just to keep up! So until the counterfeiting comes to an end what else can I say except “enjoy your slavery.”
You don’t have to say anything else, and what you said, you said very well. Great comment.
I gave you a thumbs up. To what you wrote I’d add they take that counterfeit money and buy/exchange it for tangible items/resources (land, houses, businesses, etc.).