The banks are robbing us of purchasing power. They are stealing our wealth.

Thorsten Polleit –

"The Wealth Redistribution Scam that Is Inflation"
_{(Right-click title to see original story)}
   

_{(Image source)}

– Flash Points –

1 – Inflation is commonly misunderstood to simply be rising prices.
2 – In fact, inflation is an increase in the supply and quantity of money.
3 – Inflation robs us of our purchasing power, our savings, and our wealth.

– Synopsis –

In a recent post on Mises.org, economist and honorary professor Thorsten Polleit explained that inflation is not – as is commonly believed – the phenomenon of rising prices. The increasing cost of goods and assets is merely a “symptom”  of inflation. 

Creating Money = Destroying Wealth

In fact, inflation is nothing more than an increase in the supply of money. It is caused by central banks, which can create money that is not backed by any assets or wealth.

One problem with the newly created money is that it does not retain its purchasing power. The more money created, the less its value, and the lower its purchasing power. In essence, by creating more money, the banks are robbing us savers of purchasing power. They are stealing our wealth.   _{(Image source)}

Priced Out

Once a central bank goes on a money printing spree, inflation will occur not only in consumer prices, but also in asset prices.

The effects of asset-price inflation are similar in kind to those of consumer-price inflation, but worse in degree. With consumer-price inflation, you will still be able to buy certain goods. Unfortunately, you’ll only be able to afford less of them. With asset-price inflation, however, prices will inflate so high that you’ll be priced out of the market.

Sound Solution

The only way to avoid the inevitable hazards of central-bank-created inflation is through sound money. Gold, silver, and bitcoin are excellent alternatives to fraudulent fiat currencies.

– Insight from Outside –

Whenever a central bank creates new money, all that newly created money is nothing more than “fraudulently”  created money.

In other words, it’s counterfeit money.   _{(Image source)}

Faithless and Fraudulent

The only reasons that money is accepted and used are because it has been declared “legal tender”  by those counterfeiters, and because it is supposedly backed by “the faith and credit”  of the issuer   those counterfeiters. Faith and credit which soon prove to be nonexistent

Some economists say that inflation is effectively “wealth redistribution.”  Others simply call it “robbery.”

Bandits and Robber Barons 

Both consumer-price inflation and asset-price inflation rob us of our savings and wealth. One just has to consider the effects of the Federal Reserve’s decade-long money-printing frenzy. Most of that money has stayed in the financial sector, causing ever-increasing prices of stocks, real estate, and other such assets over the past decade.   

With consumer-price inflation, you may have to cut back on your purchases, and buy only a 6-pack of beer, not a 12-pack.

With asset-price inflation, however, it’s not simply a matter of cutting back. You will never be in the market for a new house or a new car, and you surely will never be able to invest in stocks. Not after having been robbed of much of your money.

Meanwhile, the top 1% make out like bandits and robber barons. Instead of buying 6 new cars, they can go out and buy 12 new cars. With cash. With abandon. With impunity.    _{(Image source)}

          Previous posts in this series – "Death of the Dollar, Posts 1–30"