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Wealth Insight 2009-11-20

What governments don’t want you to know about inflation.

Critics say that inflation is a form of theft from the people. Not just any old critics either! The most famous is probably John Maynard Keynes.
Keynes is known as the father of our modern economic system. He said that inflation is a way to secretly confiscate an important part of the wealth of citizens.
He said inflation is a hidden and destructive thing. And he said that it goes almost entirely undetected! “Not one man in a million” diagnoses the problem.
So governments secretly like and make use of inflation. What for? There are a few things, such as …
* If they owe a lot of money, it means they can repay the debt with cheaper money. Over the long term their debt shrinks.
But the one I am really interested in is this one:
* It gives the illusion of wealth creation. In fact, the reality is wealth destruction. Why? Because the prices of things like property and stocks rise. Think about those ‘projected values’ in the glossy folders from the financial institutions. The money you’re going to cash out when you retire looks phenomenal. Even when the consultant points out that it will be worth less because of inflation, it’s hard not to feel rich when you see all those ‘millions’! And when you feel rich, you don’t ask questions or say no to the sale.
There’s a lot riding on keeping this secret hidden. So there’s lots of confusion and lies. What kind of lies? Perhaps the biggest lie is how inflation is measured and reported.
For instance, in the US, core inflation doesn’t include oil prices and food. Two of the most inflationary things in existence.
So governments play with numbers to mislead people. They play with words too, talking about PCE and “wage-price spirals” and so on. The aim is to confuse and mislead.
The lesson? Realizing there is an illness is the first step to curing it. The illness in this case is inflation, and its cover-up. The second step? Deciding to take control of your own financial health. Not leaving it in the hands of those who want you confused and compliant. Find answers about the average person’s financial situation at Warriors Against Debt. And the truth about wealth creation here: Formula for Riches®.
Hannes Dreyer
Wealth Creators Mentor
PS I published some new articles this week - I hope you enjoy them:
Home Improvement/Renovation and Property Investments.

Neat Ideas For Basement Renovations
Tons of Home Improvement Help
Great Ideas For Bathroom Additions
Misconceptions Around Home Renovation
Effective Strategies For Room Addition Plans

 

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Juhan De Milander
Ek kan nie glo hoeveel dit vir my beteken het nie. Nie net het dit my uitkyk op alles heeltemal verander nie maar dit het my soveel meer positief gemaak. Vir my begin alles nou van binne, buite gebeure maak nie meer so baie saak nie en ek probeer my reaksie op dinge heeltemal tot die positiewe te hou. Selfs nou as ek negatief Read more...
Stian De Jager
From the first day I met you Hannes, at one of your free seminars, I realized that you were all about practical application of sound theory. It was very clear to me that you are a man of principle and someone who does not believe in Read more...
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