The mentality of the population in the USA thinks that
prices are rising. Things cost more. It
is kind of laughable. The actual fact is, the dollar is worth less than it was
yesterday.
Things are not more expensive; the dollar has lost value. $20 used to fill a gas tank in the 1960’s. Now in 2022 20 gallons of gas costs $120.
The fact to realize, is that things
don’t cost more, your dollar buys less. Politicians’
blame this price rise on the gas refiners and the stores. How dare you gouge the consumer!
What we are really looking at is an
erosion of value of the dollar---it doesn’t buy as much as it used to.
The concept to look at is: a rise in
prices doesn’t mean the item is more expensive. The dollar doesn’t have the
purchasing power it once had.
6 comments:
And when the dollar ceases to be the world's reserve currency...
Hi Sack
We could have a debt Jubilee ---not sure how it would transpire. But it doesn't look good for the banks.
You mean, the bankers might have to get a proper job? Maybe the Jackson quote isn't correct to the letter, but it's true to the spirit:
https://www.businessinsider.com/sorry-andrew-jackson-probably-never-said-that-den-of-theives-quote-2010-1?r=US&IR=T
Hi Sack
Thanks for the link. It is interesting,
Jackson shut down the Second bank of the US and did little harm to the nation.
Today I'm not sure that could happen. The banks have to survive so that the government can borrow from them.
In my lifetime we have gone from millionaires to billionaires, inflation will kill the life savings of our retirees.
On top of that, our government can't meet Social Security payments once the interest rate hits 8.5%
At that point we are bankrupt.
Jim, you're quite right about inflation being loss in the value of the currency. However I don't think Social Security is a big worry - the problem is small enough to be soluble by a minor tax rise.
The monster problem is going to be medicare and medicaid - that looks far too big to be soluble by any plausible tax rise. Presumably nothing intelligent will be done about it until fedgov insolvency is imminent.
At least you are not on your own: the rest of the West is in the soup too.
Unless Australia is exempt by virtue of its huge oil, gas, and mineral industries - but the Aussies will conceivably ruin themselves with Green Energy nonsense.
Hi dearieme
I disagree that Social Security is a small problem. Right now, it is projected to be bankrupt in 2036. Take 10 years off for politicians that tend to underestimate the numbers. Plus, benefits are inflation protected.
I agree that Medicare and Medicaid are big problems, but government inefficiency can turn those problems into a red tape morass. Kind of like Great Britain.
As you suggest, this is a world problem that has been exacerbated by the Green Energy people.
What seems to be certain is there will be some sort of financial collapse. The class that the banks have borrowed heavily from are the people saving for retirement. These are the people to be hurt the most.
When you trash a currency, you destroy the savings of all. The neat thing is that most of them are old, so the memory of what happened will not last long.
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