Mercy! Mercy! That Dang Nabed PERCY!

Inflation....Invisible Taxation

Inflation…..Invisible Taxation

Nobody agrees with my views on economics but I have them anyway. They work for me. Here is one of them.

If you put all the value of this country in a fiscal bathtub it would be only so full. It couldn’t get any fuller because there is only so much value in the country. Now the government can print money up to that value. What they do is throw an IOU into the tub next to it (debt tub) for the value that is in the fiscal bathtub. That is called the debt and the ceiling in the debt tub should not go above what is in the value tub. When it does the result is inflation.

Now if an employee of a business is managing an account with say $100,000 in it and skims of $ 10,000 that is called embezzlement. They go to jail. However when the government takes value from the savings of Americans through inflation this is treated with a shrug….almost as if it is an act of nature….something unavoidable like a change in the weather.

Most of the money in this country is controlled by senior citizens who are sitting on a nest egg. Historically they have trusted the government to insure that nest egg. What is happening now is that there is a very low interest rate being paid on Cds and there is “Invisible Inflation” taking place. In other words the government has printed more in currency than there is value. This is where the money is coming from for the “Redistribution” that is taking place.

There is simply not enough being collected in taxes to pay for the overhead of government and the difference is being made up in Inflation which is an invisible form of taxation. It is a wire and mirror game and the trick to making it work is using creative accounting techniques. The government does not want the citizens to figure out where they are getting the money to keep going and that money is coming from inflation. Inflation that isn’t even being “Fessed” up to.

I had to chuckle when it was reported that the government does not use food prices and fuel prices in calculating inflation. I have to say that the top two indicators on my list for calculating how much more it costs this year than it did last year are food and gas. I can remember what I paid last year at the supermarket and gas pump. My common sense tells me it is ten (10) percent more than last year.

This is essentially a ten percent tax on savings accounts. Accounts that are only paying the holder one percent. Having money in a CD account is not a smart thing these days. People with greater understanding than our senior citizens (Foreigners and Investors) understand this and are beginning to demand higher returns on government notes and it is the Cds that old codgers like me that are sitting on that is paying the bill.

Used to be citizens in this country (Like Japan) trusted the government more than anyone else. Unfortunately this no longer the case. Conservative Mutual funds that trade in actual value and funds that deal in precious metals are a much more sensible approach to safeguarding your next egg.