Thursday, 24 May 2018

Inflation: Being taken for a ride by 'official policy'.................from Rico

Central Banks (for argument's sake, we'll use the FED here) have an 'official policy' of inflation. Their patron saint of economics, Maynard Keynes, told them this was the holy writ. Gospel.
- The FED, for example, has a 2% inflation rate as 'official policy' built into its model. Sounds vaguely benign, right?
Not if you think of it another way...taking-away 2% of the value of your money per year really adds up over time.
- It adds up to a lot, in fact.
In 1965 the new Ford Mustang cost $3,500. By 1982 it was $6,572. Today? Roughly $25,680.
- Since 1965 (53 years) that's a seven-fold increase in nominal price.
- Since 1982 (36 years) that's a four-fold increase in nominal price.
- That's how much the purchasing power (value) of the dollar has been debased by inflation. See how that works?
Now please consider this. When, as a matter of 'official policy' the currency you trade your time and life  for is thus devalued/debauched, then the 'official policy' is that your time and your life are worth nothing and can be devalued/debauched.
Flip this over, and that's how much the makers of 'official policy' are then worth to the rest of us.
- Nothing.

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