Inflation Is Out Of Control
Have you noticed that recently the prices for just about all the main staples, groceries in particular, have been going up rapidly?
I was in the grocery store just yesterday and I noticed that the little pack of Oscar Meyer Lunchables, with the Turkey and Cheddar, was $2.25. This is bad enough but the fact is that 3 months ago I was paying $1.53. And six months ago they were $1.37. Twelve months ago- $1.25.
What the hell?!
This is across the board for just about every single grocery product that I buy.
This is 80% price inflation in 12 months.
Vitamin Water went from $0.89 to $1.29 in the same period.
That is 45% inflation.
I could fill 100 pages with similar products here but I think you get the point. And if you haven’t been noticing this yourself then you are either blind or you just don’t care.
Oh, how about the $4.99 per lb tomatoes? I suppose there are only 4 farmers in the US growing tomatoes these days. When I was a teenager I worked in a produce market and tomatoes were $0.19 per lb. That is 2626% increase in 17 years. That is an average of 154% per year!
Any idea what the federal government currently reports the inflation rate to be? 2.1%. This is as of 4.10.2010 per the Federal Reserve.
Give us all a giant break please! I would like to know where the people posting that number shop so that I can shop there too.
This is absolutely absurd.
It begs the question, “Why would they be lying about the inflation rate?”.
There are reasons my friends. Big ones.
What Is Inflation?
I have spent literally hundreds and hundreds of hours looking into what the Federal Reserve does, and into exactly what is the financial policy of our federal government, and I have to tell you that we are getting royally screwed.
Sure I could write a book about this and maybe I will but for now we can just look at one thing.
Let’s look at inflation.
What is inflation anyway? Well, most Americans think of inflation simply as rising prices. This was not the original meaning, exactly.
The word was originally used in 1838 in the context of money and the economy and it was used with the meaning of increasing the supply of monetary currency in circulation, which then causes prices to rise.
Nowadays everyone is just used to the prices for everything going up like it is some sort of natural law which is supposed to happen. It’s not.
Written data is a bit hard to come by on such things but from approximately 1813 to 1913 there wasn’t really any inflation.
If a dollar bought you a wagon wheel in 1813, it still bought you a wagon wheel in 1913.
Do you find this surprising? Most Americans would. We have all just sort of gotten used to the inflation.
The Causes Of Inflation
Two main reasons: One, the government is printing money as fast as they possible can, which is flooding the world with little green pieces of paper. And two, the value of this paper is not backed by anything whatsoever.
The only reason these little pieces of paper can be used to exchange for things like food, and rent and cars, etc., is because you, and the other guy, think that it has value.
It used to be that our currency was backed by gold.
You could take some gold down to the bank and they would give you a piece of paper with the amount written on it. Vice-versa, you could take that little note to the bank and trade it for the same amount of gold. I like to look at this as being similar to taking your clothes to the cleaners and them giving you a ticket to redeem them at a later time.
The United States quite some time ago decided, during the Richard Nixon era, that our currency would in no way, shape, or form continue to be based on a gold standard.
It is now based on nothing.
They can just print and print and print and print.
This is inflation of the currency supply.
Well, why not just print enough to give every American 100 million dollars? Well, because that would just reduce the value of each dollar so much that a cup of coffee would cost you $60K. It would be pointless except for the very first few people who got the money before all the prices went up.
It’s just economic fundamentals. Supply and demand. If there was only one orange tree in the world and only two bushel of oranges were harvested in the world every year then oranges are only going to be eaten by the wealthiest 1 or 2 people in the world because they are going to cost $30K each. Alternatively, if you have 100 orange trees and your neighbors and your brother and mother and every one of your friends has 100 orange tree each, and when you go for a walk down the road the entire street on both sides is completely lined with productive orange trees, well, you sure aren’t going to pay much for oranges.
Same applies to the cash.
This is supply and demand– the most fundamental concept of economics.
If you want the prices to stop inflating we have to get them to quit printing money. That is the job of the Federal Reserve by the way. (And they aren’t just printing it. They also just add zeros to the amounts with their computers as well, without actually printing, which is even worse!)
What can you do about it?
The Solution To Inflation
Chances are the they aren’t going to stop printing money any time soon because that is the only way they can come close to paying the interest on our debt. So the dollar is going to continue to become less and less valuable. That is a guarantee.
Gold and Silver and other precious metals however do retain their value. What changes is the value of the dollar.
So if gold is $1100 per oz right this moment and the dollar continues to become less valuable due to inflation, then it’s going to take more and more dollars to buy and oz of gold. This is what is happening with strawberries and tomatoes and avocados, toilet paper and everything else. It takes more and more dollars to get these items because the dollar is progressively becoming worthless.
Zimbabwe has a 100,000,000% inflation right now by the way, which didn’t start that way. How did they get there? By detaching the value of the currency from gold and by printing it like crazy. That’s how.
But you know, if you grow strawberries and you know a guy who grows tomatoes you could probably trade a box of strawberries for a certain number of tomatoes, let’s say 5 tomatoes.
And even if the dollar does continues to become less valuable you will still be able to trade your berries for those tomatoes.
Well, it is said that way back in Roman Empire times that 1 oz of gold would get a man a new toga, a belt and a pair of sandals. Today if you had an oz of gold guess what– you can still get a nice suit, belt and shoes for it.
Isn’t that interesting?
Gold and silver preserve wealth and retain their value.
The way to preserve your wealth is to turn your cash into silver and gold. The dollar is 37 times less valuable now than it was in 1913. That means it has lost 97% of it’s value. Yes, you could buy 37 pizzas in 1913 for what you can now spend on just one.
The government printed more money in the year from 2008 to 2009 than all the money that had even been printed in the entire history of our country.
Did you get that?! I mean Holy Crap! Those government chaps, and Ben Bernake have just stomped on the printing press accelerator like it has never been stomped on before!
What do you think this will do to the value of the dollar? Do you see now why such inflation?
If nothing changes gold will soon be worth $15,000 per oz. It’s about $1100 right now.
The lower the US dollar drops, the higher goes Gold and Silver.
To learn more about how you can use gold and silver to preserve and create wealth, even if you have very little to invest, be sure to check out all the Gold and Sliver information on my Numis Network page.