informationliberation
The news you're not supposed to know...




An Introduction to Austrian Economics: Understand Economics, Understand Everything
The Century of the Self: The Untold History of Controlling the Masses Through the Manipulation of Unconscious Desires
The Disappearing Male: From Virility to Sterility

The Obama Deception: The Mask Comes Off
Operation Gladio: The Hidden History of U.S. Sponsored False Flag Terrorism in EuropeThe New American Century: The Untold History of The Project for the New American Century
(more)
Article posted Mar 01 2012, 1:15 PM Category: Economy Source: The Economic Collapse Print

Inflation Is A Tax And The Federal Reserve Is Taxing The Living Daylights Out Of Us

by Michael Snyder

Ronald Reagan once famously declared that inflation is a tax, but sadly most Americans did not really grasp what he was talking about.  If the American people truly understood what inflation was doing to them, they would be screaming bloody murder about monetary policy.  Inflation is an especially insidious tax because it is not just a tax on your income for one year.  It is a continual tax on every single dollar that you own.  As your money sits in the bank, it is constantly losing value.  Over time, the effects of inflation can be absolutely devastating.  For example, if you put 100 dollars in the bank in 1970, those same dollars today would only have about 17 percent of the purchasing power that they did back then.  In essence, you were hit by an 83 percent "inflation tax" and all you did was leave your money in the bank.  So who is responsible for this?  Well, the Federal Reserve controls monetary policy in the United States, and the inflationary monetary policy that the Fed has gotten all of us accustomed to is taxing the living daylights out of us.  This is madness, and it needs to stop.

In previous articles I have discussed how the Federal Reserve creates money.  If you have not read those articles yet, you can find a few of them here, here and here.

The Federal Reserve system is designed to have the U.S. money supply expand indefinitely.

And that is exactly what has happened since 1913.

But when the money supply expands, there are very serious consequences.

Every time more money comes into existence, the dollars that you and I are already holding become less valuable because now there are more dollars chasing the same amount of goods and services.

Right now, the U.S. government says that the annual rate of inflation is somewhere around 2 percent.  Those of you that have to buy food and gas on a regular basis realize how much of a joke that is.

Thankfully, there are others out there that keep track of these statistics as well.  According to John Williams of shadowstats.com, if inflation was measured the same way that it was back in 1980, the annual rate of inflation would be more than 10 percent right now.

But let's use the doctored government numbers for a moment.  Using the doctored numbers, what inflation has done to all of us is still absolutely horrific.  Just check out the chart below.  This is what the Federal Reserve was designed to do.  It was designed to constantly expand the money supply and create inflation that never ends....



Most of us have been living in an inflationary environment for so long that we have come to accept it as normal.

Most Americans believe that prices are supposed to just keep going up as time goes by.

Unfortunately, we have now entered an era when prices are going up much faster than wages are.  Family budgets are being squeezed tighter and tighter as the inflation tax keeps taking a bigger and bigger toll on all of our paychecks.

I remember the days when I could go into the grocery store and get a large bag of brand name potato chips for 99 cents.

I remember the days when I could get all the groceries that I needed for an entire week for 20 bucks.

Unfortunately, those days are long gone.

Have you been to the grocery store lately?

When I go to the grocery store these days I almost get the feeling that someone is going to ask me to fill out a credit application.

When I get to the checkout counter I almost get the feeling that the cashier is going to ask me if I want to pay with an arm or a leg.

But food is not the only thing going up.  Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.  There are millions of American families that are keeping the heat really, really low this winter in an attempt to make ends meet.

Health care is another thing that has become ridiculously expensive.  During the Obama administration, worker health insurance costs have risen by 23 percent.

Has your paycheck increased by 23 percent?

Of course we all know what is happening with the price of gasoline.  The average price of a gallon of gasoline in the United States is now up to $3.72.  It has increased by more than 90 percent since Barack Obama became president.

This is why so many economists get so upset when the Federal Reserve starts printing money like there is no tomorrow.  Inflation is a tax that is very cruel to average American families.  It destroys their wealth and it destroys the purchasing power of their paychecks.

Unfortunately, this is always what happens when a society adopts fiat currency.  Our dollars are just pieces of paper backed by absolutely nothing.  When more pieces of paper are printed up, the value of the pieces of paper already in existence goes down.

This is one of the reasons why so many people out there are talking about "real money" like gold and silver.  Unlike fiat currency, precious metals tend to hold value over a very long period of time.

For example, it will take you about three times as much U.S. currency to buy a gallon of gasoline in 2012 as it did back in 1990.

But an ounce of silver will actually buy you more gasoline today than it did back then.

Back in 1990, an ounce of silver would buy you about 4 gallons of gasoline.  Today it will buy you more than 8 gallons of gasoline.

Talk about holding value.

We see the same kind of thing happening with gold.

When Barack Obama first took office, an ounce of gold was selling for about $850.  Today an ounce of gold costs more than $1700 an ounce.

It is not that gold is becoming so much more valuable.  It is just that the U.S. dollar is losing value on a continual basis.

So why don't the U.S. government and the Federal Reserve quit flooding our economy with more paper money?

That is a very good question.

Sadly, our leaders seem to have a never ending addiction to more paper money and the American people are not demanding change.

On Wednesday, Federal Reserve Chairman Ben Bernanke told Congress that the Federal Reserve may have to implement even more stimulus measures in order to help the economy.

Of course such talk is utter insanity considering what Bernanke and his cohorts have already done to the monetary base over the past few years....



Thankfully, the vast majority of that money is still trapped in the financial system.  If all of that money was floating around on the street inflation would be far worse.

Those of you that think that the surging stock market is a sign of "economic recovery" should realize that the market has been pumped up by huge amounts of funny money from the Federal Reserve.  Just because the number of dollars circulating has increased does not mean that things are getting better.

There is much more to all of this of course, but what is important for the man and the woman on the street is the fact that when the Federal Reserve expands the money supply it is a tax on all of us and it makes all of us poorer.

So what do you think about the inflation tax and the reckless monetary policy of the Federal Reserve?

Please feel free to leave a comment with your thoughts below....





Latest Economy
- American Ranking Plummets in Global Index of 'Personal Freedoms'
- Your "Children Will Be Fined" If You Fail To Sign Up For Obamacare: People Are Going To Be In for A Shock
- The End of QE Is Not the End of Bad Policy
- "They Just Want The Money!" - The IRS Can Now Seize Accounts On Suspicion Alone
- Hillary: 'Don't Let Anybody Tell You' That 'Businesses Create Jobs'
- Does Ebola Justify the State?
- Low Inflation? The Price Of Ground Beef Has Risen 17 Percent Over The Past Year
- EFF, Internet Archive, and reddit Oppose New York's BitLicense Proposal









Comments 1 - 2 of 2 Add Comment Page 1 of 1
charleswilson

Posted: Mar 02 2012, 8:43 AM

Link
I keep talking about the International Bankers like they are the villains
behind all of our problems in this country, Well thats because they are.
These International parasites will do about anything to gains control over
planet earth, and all of its natural and human resources. The CFR; the Bil-
derberg group;the Trilateral Commission ; the Vatican Jeuits; the Round
Table; the United Nations ; IMF/WB ; and the International Banking criminals
backed by the Rothchild banking family and other groups/cabals we have
never heard of, are behind all of the inflation. These groups have created
all the major wars on the planet, for controll. Its insane when one families
net worth is over I00 Trillion dollars (Rothchilds) while children in certain
countries starve to death. Its also insane when I resently heard an American
politician say its ok for these trillionaires to have that much wealthm, as long
as they got it legally. And some people agree with that view. For humanity,
the Central Banks(Federal Reserve) systems must be detroyed. If we don't
detroy them, this corrupt criminal banking system will detroy the planet and
all of its inhabitants, thru inflation and wars.
Anonymous

Posted: Mar 02 2012, 2:05 PM

Link
245 Very insightful, however, it is a bit biased to note that gas has gone up since Barack Obama has been in office and completely ignore that it was even higher during the W. Bush Administration. It dips up and down and I know that it's not arbitrary (there are people controlling this) but it's not ALL Obama's fault. Sure, he has proved to be way less change than we all wanted, but he's just another talking head, and has to be balanced by silly Congress/House members that are locked up in debate over things that often don't really matter to the common people. What did we really expect from someone who wants to be President of the United States (which seems like a horrible job)?

Also though, yeah, this inflation shit seems fucked. Only the 1% can afford to keep up. How convenient.


Add Comment
Name
Comment

* No HTML


Verification *
Please Enter the Verification Code Seen Below
 


PLEASE NOTE
Please see our About Page, our Disclaimer, and our Comments Policy.


FAIR USE NOTICE
This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the DMCA and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.

About Us - Disclaimer - Privacy Policy



Advanced Search
Username:

Password:

Remember Me
Forgot Password?
Register

It's "An Extortion Racket:" Police Chief Moved to Tears After Exposing Corruption in His Department - 11/25Good Samaritan Hands Lost Purse To Cop, Cop Steals Cash Before Returning - 11/25Albuquerque Cop Who Killed Homeless Man Will Retire With Full Benefits - 11/25This is What a High School Football Game Looks Like In a Police State - 11/21This Minnesota Mom is Facing 2 Years in Jail for Saving Her Son's Life - 11/25Cop Keeps Job After First DUI, Now He's Being Charged With A Second - 11/25Darren Wilson and the Protocols of Official Exoneration - 11/25Why Does The Media Ignore Straightforward Police Executions? - 11/24

Rialto, CA Police Made to Wear Cameras, Use of Force Drops by Over Two-ThirdsCop Who Karate Chopped NY Judge In Throat Gets Off Scot-FreeFlorida Cop Smashes Compliant Woman's Face Into Car -- "Maybe Now You Can Understand Simple Instructions"VIDEO: Lapel Cam Reveals A Day In The Life Of A U.S. Police Officer (Tasing, Beating, Breaking & Entering, Stomping On Heads... and Laughing About It)Caught On Tape: Officer Sucker Punches Inmate In Face, Files Report Claiming 'Self Defense'Insult Person On Twitter, Go To JailSWAT Team Brings TV Crew To Film Raid Against Threatening Internet Critic -- Raids Innocent Grandma InsteadCop Karate Chops NY Judge In The Throat
(more)

 
Top