This ain't rocket surgery. Not only do we know what they are doing, THEY know what they're doing. First, inflation is always and everywhere a monetary phenomenon. (HT to Milton Friedman) What does that mean? It means that when you print money from thin air, it is worth less - i.e. inflated. Second, why would they do that? Because o…
This ain't rocket surgery. Not only do we know what they are doing, THEY know what they're doing. First, inflation is always and everywhere a monetary phenomenon. (HT to Milton Friedman) What does that mean? It means that when you print money from thin air, it is worth less - i.e. inflated. Second, why would they do that? Because of two things: they want more money for themselves because money is power, and they want you, the middle class, to have less money for the same reason. The titular "Biden" administration is doing this deliberately and it is about control.
There is only one thing you need to know about inflation. Inflation is a tax. Nothing more, nothing less. But it is a particularly heinous tax because it not only hits your income, it hits anything you have saved. It is also a "regressive tax" because it hits hardest those with the least money - the poor.
How do the monied classes respond? They hold hard assets - land, gold, silver, foreign assets. Stocks will go up and down, but since they are valued in dollars, as the dollar value goes down they typically go up by the same percentage as inflation PLUS some return above inflation.
We are under an unprecedented assault from all directions. Just remember, there is NEVER deflation, so any money you lose today is gone forever. Elections - especially cheated elections - have consequences. Remember that in November.
A small amount of inflation is necessary to keep the economy moving. Without it, there is no incentive to invest in projects such as buildings, factories, etc. If my money today will be worth as much in 30 years, why would I ever take a risk and invest in anything?
That said, ANYONE could have seen this inflation wave coming a mile away. First Trump pumped the economy full of newly printed money while lowering taxes, then Biden continued pouring in more newly printed money. Add to that, half the population sitting in their houses for two years socking away money. I had friends who lost their jobs and, as a couple, pulled in $80K a year in unemployment with next to nothing to spend it on. ESPECIALLY, in urban areas where people spend more money on experiences (restaurants, shows, travel, etc.) than goods. There were no experiences to spend the money on--everything was closed.
No, inflation is NOT necessary, and is a TAX that steadily erodes the wealth of a population. Unless you put money under a mattress, its worth in thirty years will not be the same; it will be worth itself plus earnings, whether they be an investment in the stock market or just a passbook savings plan at the bank. Now, putting your money in the bank does nothing but allow it to dwindle more slowly than the mattress method.
We need sound money, not a stealth tax. My technique would be to specify a basket of 500 goods and services - like the S&P 500 does for stocks - and congress shall be taxed on its member's total wealth at twice the inflation rate. Problem solved.
I appreciate the sentiment, but everything is always paid-for. Always. I believe it was Heinlein who popularized the acronym, TANSTAAFL - there ain't no such thing as a free lunch. The problem in my opinion is that we have a system that incentivizes bad behavior. People live deep in debt because in many cases the have every incentive to do so and zero incentive - or disincentive - to live within their means. If they pay for their debt with inflated money or default, somebody picks up that tab, and it's going to be people who worked and saved.
Nowadays the tax levels are incredible - and largely hidden. Someone did a study in the 'eighties, and I believe the total tax burden for the average American was well over 50%. And how do our trusted officials husband our hard-earned resources? They leave $85 billion of weapons behind in the desert for our enemy to use to kill our sons and daughters, and probably tens or hundreds of millions of fencing supplies in the southwest deserts of America to rot in the sun and rain. Feh.
When I was growing up, one member of the household worked a paying job and the other made a home and raised the family. Now the gub'ment wonders why people are not getting married or having children. Ask the young man and woman who are working three jobs between them just to survive. (edited for clarity)
Also true: Debts that can't be paid won't be paid. Either a lot of the debt gets washed out of the system through bankruptcy or write-downs or it has to be inflated away - or the borrower dies. The question is which bitter pill to swallow, Inflation or another banking crisis + recession.
Oh, I just got tired of, "this ain't brain surgery" or "rocket science." I don't think it's original, though. (Actually, I've seen a little brain surgery; I had a cousin who was a neurosurgeon - using that as a metaphor for "smart" doesn't touch how smart those guys really are. LOL)
This ain't rocket surgery. Not only do we know what they are doing, THEY know what they're doing. First, inflation is always and everywhere a monetary phenomenon. (HT to Milton Friedman) What does that mean? It means that when you print money from thin air, it is worth less - i.e. inflated. Second, why would they do that? Because of two things: they want more money for themselves because money is power, and they want you, the middle class, to have less money for the same reason. The titular "Biden" administration is doing this deliberately and it is about control.
There is only one thing you need to know about inflation. Inflation is a tax. Nothing more, nothing less. But it is a particularly heinous tax because it not only hits your income, it hits anything you have saved. It is also a "regressive tax" because it hits hardest those with the least money - the poor.
How do the monied classes respond? They hold hard assets - land, gold, silver, foreign assets. Stocks will go up and down, but since they are valued in dollars, as the dollar value goes down they typically go up by the same percentage as inflation PLUS some return above inflation.
We are under an unprecedented assault from all directions. Just remember, there is NEVER deflation, so any money you lose today is gone forever. Elections - especially cheated elections - have consequences. Remember that in November.
A small amount of inflation is necessary to keep the economy moving. Without it, there is no incentive to invest in projects such as buildings, factories, etc. If my money today will be worth as much in 30 years, why would I ever take a risk and invest in anything?
That said, ANYONE could have seen this inflation wave coming a mile away. First Trump pumped the economy full of newly printed money while lowering taxes, then Biden continued pouring in more newly printed money. Add to that, half the population sitting in their houses for two years socking away money. I had friends who lost their jobs and, as a couple, pulled in $80K a year in unemployment with next to nothing to spend it on. ESPECIALLY, in urban areas where people spend more money on experiences (restaurants, shows, travel, etc.) than goods. There were no experiences to spend the money on--everything was closed.
No, inflation is NOT necessary, and is a TAX that steadily erodes the wealth of a population. Unless you put money under a mattress, its worth in thirty years will not be the same; it will be worth itself plus earnings, whether they be an investment in the stock market or just a passbook savings plan at the bank. Now, putting your money in the bank does nothing but allow it to dwindle more slowly than the mattress method.
We need sound money, not a stealth tax. My technique would be to specify a basket of 500 goods and services - like the S&P 500 does for stocks - and congress shall be taxed on its member's total wealth at twice the inflation rate. Problem solved.
Most of the population likely has more debt than wealth though, if incomes also rise inflation might not be so bad.
I appreciate the sentiment, but everything is always paid-for. Always. I believe it was Heinlein who popularized the acronym, TANSTAAFL - there ain't no such thing as a free lunch. The problem in my opinion is that we have a system that incentivizes bad behavior. People live deep in debt because in many cases the have every incentive to do so and zero incentive - or disincentive - to live within their means. If they pay for their debt with inflated money or default, somebody picks up that tab, and it's going to be people who worked and saved.
Nowadays the tax levels are incredible - and largely hidden. Someone did a study in the 'eighties, and I believe the total tax burden for the average American was well over 50%. And how do our trusted officials husband our hard-earned resources? They leave $85 billion of weapons behind in the desert for our enemy to use to kill our sons and daughters, and probably tens or hundreds of millions of fencing supplies in the southwest deserts of America to rot in the sun and rain. Feh.
When I was growing up, one member of the household worked a paying job and the other made a home and raised the family. Now the gub'ment wonders why people are not getting married or having children. Ask the young man and woman who are working three jobs between them just to survive. (edited for clarity)
Also true: Debts that can't be paid won't be paid. Either a lot of the debt gets washed out of the system through bankruptcy or write-downs or it has to be inflated away - or the borrower dies. The question is which bitter pill to swallow, Inflation or another banking crisis + recession.
I'll give them this; it'll be way easier to pay off the debt with inflated dollars. That's the only possible way that they'd be able to do it.
Jim, are you trying to coin a new phrase with that mixed metaphor (“rocket surgery”)? Not really sure it works! Otherwise, your post is spot on.
" Never shop for bargains when considering brain er-rocket surgery and parachutes. "
Oh, I just got tired of, "this ain't brain surgery" or "rocket science." I don't think it's original, though. (Actually, I've seen a little brain surgery; I had a cousin who was a neurosurgeon - using that as a metaphor for "smart" doesn't touch how smart those guys really are. LOL)