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Inflation is Essentially a Wealth-Distribution Scam ~ Thorsten Polleit … (Death of the Dollar–37) with Link to Full Story

maJes.ty@majes.tytyty (79)2218d

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)
   

(Image source)

– 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.

One problem with the newly created money is that it does not retain its purchasing power. The more money created, the less its value, and the lower its purchasing power. In essence, by creating more money, the banks are robbing us savers of purchasing power. They are stealing our wealth.   (Image source)

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 –

Whenever a central bank creates new money, all that newly created money is nothing more than “fraudulently”  created money.

In other words, it’s counterfeit money.   (Image source)

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”  of the issuer   those counterfeiters. Faith and credit which soon prove to be nonexistent

Some 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.

With asset-price inflation, however, it’s not simply a matter of cutting back. You will never be in the market for a new house or a new car, and you surely will never be able to invest in stocks. Not after having been robbed of much of your money.

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"

Comments · 10

  • @polarmystro(60)· 2205d

    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

  • @hivebuzz(74)· 2213d

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  • @chrisinphuket(62)· 2215d

    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.

  • @alexbalan(60)· 2215d

    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.

    Posted using Dapplr

  • @paragism(66)· 2216d

    It has really died

  • @wiseagent(81)· 2216d

    This approach on the topic is very interesting and didactic. The dollar's devaluation process may be starting.

  • @mintymile(69)· 2217d

    Hey well written article. Who are the 1% who will not be affected with this purchasing power crisis ...the politicians?

  • @bhoa(68)· 2218d

    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.
  • @gandhibaba(75)· 2218d

    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.

  • @cranium(76)· 2218d

    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.