Have you noticed prices going up lately? Not just gasoline, but other things.
Juice and cereal are put in smaller containers, so less can masquerade as more; medical bills have gone through the roof and those with HMO’s have seen their co-pays increase and simultaneously become more restrictive; gold and oil have doubled in price over the last few years; and even the stogy euro stands at about $1.30, meaning the dollar has lost 30% of its value in Europe.
But why?
What’s going on?
Simple.
Our beloved government is printing huge amounts of money to pay its bills. With more dollars chasing goods, each dollar is worth less. This causes higher prices. In other words, the Fed has inflated the total amount of money dramatically.
But why?
To pay its bills, to fund things like the Iraq war, and bridges to nowhere.
Rather than trying to raise taxes, which is unpopular, it quietly increases the money supply – inflates it.
You probably thought inflation was prices going up.
Nope.
Inflation is when the dollar becomes worth less.
This isn’t a new problem. Since FDR took us off the gold standard in 1930, our currency has steadily inflated until the dollar is now worth about four cents. Four cents!
Take a dollar out of your purse or wallet. Look at it. Notice there is nothing printed on the treasury note you use to buy milk and bread, stating its worth. It used to be redeemable for something of value, but no more.
Now, sometime during this reading your head is supposed to hit the keyboard with a thud.
I am, after all, writing about economics. Dull, dull, dull.
And that’s exactly why the government gets away with inflating the currency. No one understands or cares to understand economics.
You know who is hurt the most by inflation?
The poor and elderly. When Uncle Sam prints more unredeemable dollars and pumps them into the economy, in the act of paying its bills, prices of stuff go up, and Grandpa Nelson can no longer afford his winter heating bill.
So what can you do?
First, read what I have to say about this, more will definitely follow, and
Secondly, demand that the Fed quit trying to convince us that “A little inflation is a good thing.” It’s only good for a greedy federal government, not you, me, or Grandpa Nelson.
Grimgold