Posted on 06/26/2011 5:14:27 PM PDT by billflax
On my daughter’s birthday, she received a crisp new $5 bill, which she promptly deposited in her piggy-bank. Never foregoing an opportunity to expound on free market principles, I warned about her susceptibility to a subtle means of theft even more devious than a burglar breaking in at night against whom you might get a clear shot.
Usually, when she asks why it’s, “Because I told you so!” But for inflation, because Washington wills it, that explanation hardly suffices. And as often as economic prognosticators prescribe currency debasement as some miraculous panacea, her question is a good one. Why do we suffer inflation?
I searched online for “benefits of inflation.”
Inflation Spurs Growth – The theory goes something like this: Since savers realize the value of their money will erode, they spend more quickly thus stimulating the economy. If we believe tomorrow brings higher prices, we buy today. Basically, we spend before the monetary authorities steal our money’s value. Hmm.
The proponents of consumption-based stimuli overlook the essentiality of saving. While burying your money in the ground wastes its talents, most save via bank accounts or through the purchase of capital assets. Thus saving makes investment capital available for new businesses hiring new workers and creating new products that sustain and beautify life. The accumulation of capital drives growth.
(Excerpt) Read more at blogs.forbes.com ...
yes.
Another major advantage of inflation is that it steals the value of money from the citizens and transfers it to the national banking cartel.
Inflation benefits debtors....... especially kings and government debtors.
Please describe for us the process details that enrich banks by inflation.
Theft...you bet. Back in 1933 gold was $35 per ounce. Now its what? A new car cost less than $1000. However, in perspective, if you had a job during the Great Depression how many hours did you have to work to earn that $1000? Thirty dollars a week was not a bad wage and $.50 would easily buy you lunch. A streetcar ride was a nickle, transfers free, postage 3 cents. To properly evaluate “Inflationary Theft” you have to look at the number of hours you had to work to earn a certain item. If you do the math you’ll see that the “FEDERAL RESERVE HAS BEEN ROBBING US BLIND!” with government encouragement of course.It is a natural result of fiat currency.
Us?
Try researching quantitative easing.
Many who survived the Great Depression learned the hard way that borrowed money could sometimes be very difficult to pay back. These people, in later years, were very averse to borrowing.
The most recent generations have experienced constant and sometimes excessive inflation. The lesson they have learned is that you should borrow every bit you can and pay it back with inflated dollars.
Which environment do you think was most profitable for the banks? When everybody wants to borrow as much as they can? Or when people regret the borrowings they once made?
My mortgage was paid off years ago and I don't owe anybody anything, except for regular monthly bills, utilities etc. That used to be a good position to be in, not so much any more. Borrow to the hilt and pay it back with ever more worthless currency, yep, that seems to be the "in thing".
Just wait until the currency bubble bursts. That’ll be “Interesting Times!”
I gave my nephew silver bars and coins instead of cash
He’s 7 now... and may have 30 or so ounces (4 or 5 a year)
If i gave him $10 for each ounce, he’d have about $300, assuming he spent none (cash is readily spendible compared to silver).
On the other hand, the 30+ ounces are worth about 30 x $35, or $1050
Bump.
All inflation is excessive since it is theft.
That’s a good call.
For those that don’t know what physical silver is, this is a simple basic starter:
http://www.oilbull.com/how-to-buy-physical-silver/
Everywhere I turned, I heard “buy physical” yet was somewhat clueless about it (I traded the paper stuff at the time). Now, I trade the paper for fun, but am accumulating the coins and bars.
This is another one of those rants where people are griping because things aren’t perfect. There isn’t a person here, or in fact on this Earth, who can tell us how to make the supply of money expand at precisely the same rate the economy is expanding, such that there is no inflation and no deflation.
It can’t be done. Not by mere mortals.
The better rant is against deliberate policies like “quantitative easing” where the monetary authorities know full well they are debasing the currency, and by a lot, and are doing so for short-term political gain,
But that is a different thing than crabbing about the existence of all inflation, as if somebody knows how to make it zero. The best humans are ever going to do is make the quantity of their money approximately equal to the amount of goods and services in the economy. But there is still going to be some inflation or some deflation as the economy grows and contracts.
"By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens...and while the process impoverishes many, it actually enriches some.... The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose." --John Maynard Keynes (1883-1946) From "Economic Consequences of the Peace" 1920
Yes, THAT "John Maynard Keynes".
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