Monetary inflation may seem impossibly complicated, but take heart. While understanding inflation is essential to everyone, both in sensing the future and to understanding the basics of personal well-being, a degree in economics is unnecessary.
Money is basically a “medium of exchange”; an instrument of convenience, which makes it unnecessary to tote chickens or bushels of wheat or barrels of oil to market in exchange for something else of more value to each of us at any particular time or for any personal purpose.
Our concern here focuses on our Dollar — “fiat” money, backed by nothing more that our faith that money is a store of value which can be exchanged for whatever we desire. In years now long past the Dollar was a certificate redeemable in gold, silver or “the full faith and credit of the United States”. Today’s Dollar is labeled on it’s face as a “Federal Reserve Note”, redeemable only with another Federal Reserve Note. Acceptance of such mere paper requires immense faith, but has none-the-less served the purpose for several decades, although quite imperfectly.
Equally important is our expectation that money be secure and reliable as a Store of Value. This means that we should be able to expect that the price of a loaf of bread, a gallon of gasoline, or a new auto, tv, computer, dress, or visit to the doctor, will remain stable tomorrow, or next month, year, or decade.
Okay, time to try an inflation calulator (click the link — you’ll not lose us, okay?). Keep in mind that all of the inflation calculators I’ve found are based on the CPI (government’s Consumer Price Index) which is extremely flawed.
What you could buy for One Dollar in 1913 would cost you $21.23 in 2007!
What you could buy in 2007 for One Dollar would have cost you but one Nickel in 1913!
We use 1913 because that was the year beginning our Federal Reserve Bank, empowering “The Fed” to manipulate the money supply and monetary policy.
The 1971 Dollar (when Nixon removed the last of the gold backing) was worth only 19 Cents in 2007!
So that is Inflation = the continuing loss of purchasing power of our dollar. Inflation causes your Dollar to be lousy Store of Value. You actually LOSE money (=purchasing power) by stashing in in some bank which pays interest rates lower than the inflation rate.
How are “poor people”, whom the socialists like to call “lower class”, ever to realize gain and hope when there is negative incentive to save and accumulate money for investment?
Inflation is largely the result of expansion of our money supply by The Fed, done to “stimulate the economy”, but more-so because Congress has been spending far beyond anything that would seem like common sense, for socialism and for war. The National Debt has climbed in record levels which cannot be paid. You’ll find other discussion of that here on Morality101. These things have caused the inflation rate to increase toward runaway levels – that’s hyperinflation. More and more of us have come to realize that our dollar will soon collapse and become worthless; it has gone too far to stop. There will be hell to pay, so prepare as best you can!
So today we have the presidential candidates of the two “major” parties. Both candidates are members of Congress, which could have, and certainly should have, long ago reined in The Fed’s manipulation of the money supply. Neither the candidates are greatly different in their goals; both want to increase spending of money that does not exist, for the immoral purposes of socialism and war. Neither candidate is addressing the only issue of real importance — this collapse of our dollar and our economy. The media is failing us all by avoiding the hard questions which must be asked.
More about the Federal Reserve bank here on Morality101.net.
A source website with a number of awakening pages: hyperinflation . net
WARNING! 1 Jul 14 and again on 25 Aug 14, a Google Warning appeared that that site may be, or may have been, distributing malware. So I removed the link – proceed at your own risk!