The banks are robbing us of purchasing power. They are stealing our wealth.
Thorsten Polleit –
"The Wealth Redistribution Scam that Is Inflation"(Right-click title to see original story)
– Flash Points –
1 – Inflation is commonly misunderstood to simply be rising prices.2 – In fact, inflation is an increase in the supply and quantity of money.
3 – Inflation robs us of our purchasing power, our savings, and our wealth.
– Synopsis –
In a recent post on Mises.org, economist and honorary professor Thorsten Polleit explained that inflation is not – as is commonly believed – the phenomenon of rising prices. The increasing cost of goods and assets is merely a “symptom” of inflation.Creating Money = Destroying Wealth
In fact, inflation is nothing more than an increase in the supply of money. It is caused by central banks, which can create money that is not backed by any assets or wealth.
Priced Out
Once a central bank goes on a money printing spree, inflation will occur not only in consumer prices, but also in asset prices. The effects of asset-price inflation are similar in kind to those of consumer-price inflation, but worse in degree. With consumer-price inflation, you will still be able to buy certain goods. Unfortunately, you’ll only be able to afford less of them. With asset-price inflation, however, prices will inflate so high that you’ll be priced out of the market.Sound Solution
The only way to avoid the inevitable hazards of central-bank-created inflation is through sound money. Gold, silver, and bitcoin are excellent alternatives to fraudulent fiat currencies.
– Insight from Outside –
Faithless and Fraudulent
The only reasons that money is accepted and used are because it has been declared “legal tender” by those counterfeiters, and because it is supposedly backed by “the faith and credit” ofSome economists say that inflation is effectively “wealth redistribution.” Others simply call it “robbery.”
Bandits and Robber Barons
Both consumer-price inflation and asset-price inflation rob us of our savings and wealth. One just has to consider the effects of the Federal Reserve’s decade-long money-printing frenzy. Most of that money has stayed in the financial sector, causing ever-increasing prices of stocks, real estate, and other such assets over the past decade.With consumer-price inflation, you may have to cut back on your purchases, and buy only a 6-pack of beer, not a 12-pack.
Meanwhile, the top 1% make out like bandits and robber barons. Instead of buying 6 new cars, they can go out and buy 12 new cars. With cash. With abandon. With impunity. (Image source)
Previous posts in this series – "Death of the Dollar, Posts 1–30"
The process of devaluation of the dollar has begun, against its background, the Euro is increasing its gap every day. But, the price of bitcoin is especially pleasing.
Yep, it's begun and it's picking up steam. Of course, as the dollar wins the race to the bottom, all fiat currencies, including the euro, will follow. Hang on tight!
India ruppee will crash also is it?... u know can't feel more dommed thesedays...corona ans now currency crisis...can I say f*** dammit?!!
Yep, the rupee is just another fiat currency. It'll crash along with the rest. Even without Modi's input.
ha...ha!! I like how you drag Modi here... that crash will be stronger that his power. I know, he is the person who spoiled a lot of India's economy and will be partly reponsible for this. Can't help if common man suffers, it has to happen, after this a better system of money may emerge after all the storm. Bracing up!! I wonder if he knows this is going to come...he is very never mind... on economic front he is absolutely detrimental to the country for sure.
His demonetization of the rupee bills a few years ago was insane and reprehensible. Not only did it cause plenty of chaos, it also resulted in many people losing their savings.
Are you in India?
Hey well written article. Who are the 1% who will not be affected with this purchasing power crisis ...the politicians?
The elite, the insanely wealthy, etc,
That's what many of the US backed wars are all about. Trying to keep the dollar propped up with OPEC. People fail to realize that without the people's confidence in a currency not backed by gold its little more than paper and metal. Even gold itself is nothing more than a metal when the demand for it is gone. Inflation, GDP growth... all artificial numbers created by governments.
Right. In many cases, wars are fought to preserve power, and that power includes economic power. Interestingly, the prime reason Nixon abandoned the Bretton-Woods arrangement and took the world off the gold standard was because the US needed more money to finance the war in Vietnam.
As for the fake numbers, not only are inflation and unemployment numbers complete BS, but even the assets of many companies are illusory. They call it "mark-to-fantasy," which simply means that a corporation fudges the numbers and cooks the books to make it appear profitable and stable. It's neither.
And once the fantasy is exposed, the end will come quickly. The "real" numbers will be exposed, and "reality" will set in. Can't wait....
It's just paper with pretty prints on it. Like bicoin is just hashes of information 🤷🏻♂️. I don't have much economic knowledge but to me it seems like we give value to stories. Both the paper and the hash have no inherent value, just the one we create for the story they tell.
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Precisely. Neither paper nor hash nor metals have any inherent value. It's the value we as a community ascribe to those entities.
Gold and Bitcoin are both rare. Consequently, their prices will increase as people come to value them more. Simultaneously, the prices of all fiat currencies / paper money will crash, as people come to realize that they have no value, and as central banks continue to print money ad infinitum.
I was just saying i wanted to learn about inflation and the likes. After reading this post, i kind of have an insight into what it is and i want to do some research on it.
People have to be wise because this is the beginning of poverty for those who do not want to know anything about financial education.
This is such a scary thing. Well, thanks for your article. I mean, my way of thinking has been changing from the conventional way of thinking.
Scary indeed. In fact, it might even be worse than most people expect.
Hmm.. i just hope the people in power can fore see what the consequence of their actions and reroute
Hope against hope. It won't happen. We're doomed.
Having read this excellently written and quite educative post, I realized that my knowledge of inflation was screwed, really screwed. I particularly love the financial education in this post and I would say that this is the best I have read in this series. Love 💘 it a lot. More wisdom sir.
To me, it is the most eye opening as it makes me want to research more
Glad you learned something. I learned these facts about inflation only a few years back. Most people have no idea, and they will be the ones who are hit the hardest when inflation hits.
By the way, "hits" is an anagram of ....? 'Nuff said
It has really died
This approach on the topic is very interesting and didactic. The dollar's devaluation process may be starting.
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I know one guy that said that crypto and bitcoins is apart of a black market it was made from there. I disagree I know there's as many good and bad people with any kind of money. I do agree it's used there as cash as well. The devaluation may not be too bad for us consumers though.. when it comes down to it in my opinion
The US dollar is printed by a shady group of black marketeers. They work at the Fed.