Bozur
Amicus
Posts: 5,515
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Post by Bozur on Mar 15, 2012 19:22:30 GMT -5
Inflation Is A Tax And The Federal Reserve Is Taxing The Living Daylights Out Of Us
Ronald Reagan once famously declared that inflation is a tax, but sadly most Americans did not really grasp what he was talking about. If the American people truly understood what inflation was doing to them, they would be screaming bloody murder about monetary policy. Inflation is an especially insidious tax because it is not just a tax on your income for one year. It is a continual tax on every single dollar that you own. As your money sits in the bank, it is constantly losing value. Over time, the effects of inflation can be absolutely devastating. For example, if you put 100 dollars in the bank in 1970, those same dollars today would only have about 17 percent of the purchasing power that they did back then. In essence, you were hit by an 83 percent "inflation tax" and all you did was leave your money in the bank. So who is responsible for this? Well, the Federal Reserve controls monetary policy in the United States, and the inflationary monetary policy that the Fed has gotten all of us accustomed to is taxing the living daylights out of us. This is madness, and it needs to stop.
In previous articles I have discussed how the Federal Reserve creates money. If you have not read those articles yet, you can find a few of them here, here and here.
The Federal Reserve system is designed to have the U.S. money supply expand indefinitely.
And that is exactly what has happened since 1913.
But when the money supply expands, there are very serious consequences.
Every time more money comes into existence, the dollars that you and I are already holding become less valuable because now there are more dollars chasing the same amount of goods and services.
Right now, the U.S. government says that the annual rate of inflation is somewhere around 2 percent. Those of you that have to buy food and gas on a regular basis realize how much of a joke that is.
Thankfully, there are others out there that keep track of these statistics as well. According to John Williams of shadowstats.com, if inflation was measured the same way that it was back in 1980, the annual rate of inflation would be more than 10 percent right now.
But let's use the doctored government numbers for a moment. Using the doctored numbers, what inflation has done to all of us is still absolutely horrific. Just check out the chart below. This is what the Federal Reserve was designed to do. It was designed to constantly expand the money supply and create inflation that never ends....
Most of us have been living in an inflationary environment for so long that we have come to accept it as normal.
Most Americans believe that prices are supposed to just keep going up as time goes by.
Unfortunately, we have now entered an era when prices are going up much faster than wages are. Family budgets are being squeezed tighter and tighter as the inflation tax keeps taking a bigger and bigger toll on all of our paychecks.
I remember the days when I could go into the grocery store and get a large bag of brand name potato chips for 99 cents.
I remember the days when I could get all the groceries that I needed for an entire week for 20 bucks.
Unfortunately, those days are long gone.
Have you been to the grocery store lately?
When I go to the grocery store these days I almost get the feeling that someone is going to ask me to fill out a credit application.
When I get to the checkout counter I almost get the feeling that the cashier is going to ask me if I want to pay with an arm or a leg.
But food is not the only thing going up. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row. There are millions of American families that are keeping the heat really, really low this winter in an attempt to make ends meet.
Health care is another thing that has become ridiculously expensive. During the Obama administration, worker health insurance costs have risen by 23 percent.
Has your paycheck increased by 23 percent?
Of course we all know what is happening with the price of gasoline. The average price of a gallon of gasoline in the United States is now up to $3.72. It has increased by more than 90 percent since Barack Obama became president.
This is why so many economists get so upset when the Federal Reserve starts printing money like there is no tomorrow. Inflation is a tax that is very cruel to average American families. It destroys their wealth and it destroys the purchasing power of their paychecks.
Unfortunately, this is always what happens when a society adopts fiat currency. Our dollars are just pieces of paper backed by absolutely nothing. When more pieces of paper are printed up, the value of the pieces of paper already in existence goes down.
This is one of the reasons why so many people out there are talking about "real money" like gold and silver. Unlike fiat currency, precious metals tend to hold value over a very long period of time.
For example, it will take you about three times as much U.S. currency to buy a gallon of gasoline in 2012 as it did back in 1990.
But an ounce of silver will actually buy you more gasoline today than it did back then.
Back in 1990, an ounce of silver would buy you about 4 gallons of gasoline. Today it will buy you more than 8 gallons of gasoline.
Talk about holding value.
We see the same kind of thing happening with gold.
When Barack Obama first took office, an ounce of gold was selling for about $850. Today an ounce of gold costs more than $1700 an ounce.
It is not that gold is becoming so much more valuable. It is just that the U.S. dollar is losing value on a continual basis.
So why don't the U.S. government and the Federal Reserve quit flooding our economy with more paper money?
That is a very good question.
Sadly, our leaders seem to have a never ending addiction to more paper money and the American people are not demanding change.
On Wednesday, Federal Reserve Chairman Ben Bernanke told Congress that the Federal Reserve may have to implement even more stimulus measures in order to help the economy.
Of course such talk is utter insanity considering what Bernanke and his cohorts have already done to the monetary base over the past few years....
Thankfully, the vast majority of that money is still trapped in the financial system. If all of that money was floating around on the street inflation would be far worse.
Those of you that think that the surging stock market is a sign of "economic recovery" should realize that the market has been pumped up by huge amounts of funny money from the Federal Reserve. Just because the number of dollars circulating has increased does not mean that things are getting better.
There is much more to all of this of course, but what is important for the man and the woman on the street is the fact that when the Federal Reserve expands the money supply it is a tax on all of us and it makes all of us poorer.
So what do you think about the inflation tax and the reckless monetary policy of the Federal Reserve?
theeconomiccollapseblog.com/archives/inflation-is-a-tax-and-the-federal-reserve-is-taxing-the-living-daylights-out-of-us
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Bozur
Amicus
Posts: 5,515
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Post by Bozur on Mar 15, 2012 19:25:40 GMT -5
related 55 Interesting Facts About The U.S. Economy In 2012
How is the U.S. economy doing in 2012? Unfortunately, it is not doing nearly as well as the mainstream media would have you believe. Yes, things have stabilized for the moment but this bubble of false hope will not last for long. The long-term trends that are ripping our economy and our financial system to shreds continue unabated. When you step back and look at the broader picture, it is hard to deny that we are in really bad shape and that things are rapidly getting worse. Later on in this article you will find a list of interesting facts that show the true state of the U.S. economy. Hopefully many of you will find this list to be a useful tool that you can share with your family and friends. Each day the foundations of our economy crumble a little bit more, and we need to wake up as many Americans as we can to what is really going on while there is still time. We have accumulated way too much debt, we consume far more wealth than we produce, millions of our jobs are being shipped overseas, our big cities are decaying, family budgets are being squeezed more than ever, poverty is rampant and we have raised several generations of Americans that expect the government to fix all of their problems. The U.S. economy is at a crossroads, and the decisions that the American people make in 2012 are going to be incredibly important.
The statistics listed below are presented without much commentary. They pretty much speak for themselves.
After reading this list, it will be hard for anyone to argue that we are on the right track.
The following are 55 interesting facts about the U.S. economy in 2012....
#1 As you read this, there are more than 6 million mortgages in the United States that are overdue.
#2 In January, U.S. home prices were the lowest that they have been in more than a decade.
#3 In Florida right now, some drivers are paying nearly 6 dollars for a gallon of gas.
#4 On average, you could buy about 10 gallons of gas for an hour of work back in the mid-90s. Today, the average hour of work will get you less than 6 gallons of gas.
#5 Sadly, 43 percent of all American families spend more than they earn each year.
#6 According to Gallup, the unemployment rate was at 8.3% in mid-January but rose to 9.0% in mid-February.
#7 The percentage of working age Americans that have jobs is not increasing. The employment to population ratio has stayed very steady (hovering between 58% and 59%) since the beginning of 2010.
#8 If you gathered together all of the workers that are "officially" unemployed in the United States into one nation, they would constitute the 68th largest country in the entire world.
#9 When Barack Obama first took office, the number of "long-term unemployed workers" in the United States was approximately 2.6 million. Today, that number is sitting at 5.6 million.
#10 The average duration of unemployment in the United States is hovering close to an all-time record high.
#11 According to Reuters, approximately 23.7 million American workers are either unemployed or underemployed right now.
#12 There are about 88 million working age Americans that are not employed and that are not looking for employment. That is an all-time record high.
#13 According to CareerBuilder, only 23 percent of American companies plan to hire more employees in 2012.
#14 Back in the year 2000, about 20 percent of all jobs in America were manufacturing jobs. Today, about 5 percent of all jobs in America are manufacturing jobs.
#15 The United States has lost an average of approximately 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.
#16 Amazingly, more than 56,000 manufacturing facilities in the United States have been shut down since 2001.
#17 According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.
#18 During the Obama administration, worker health insurance costs have risen by 23 percent.
#19 An all-time record 49.9 million Americans do not have any health insurance at all at this point, and the percentage of Americans covered by employer-based health plans has fallen for 11 years in a row.
#20 According to the New York Times, approximately 100 million Americans are either living in poverty or in "the fretful zone just above it".
#21 In the United States today, corporate profits are at an all-time high. The percentage of Americans that are living in "extreme poverty" is also at an all-time high according to the U.S. Census Bureau.
#22 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#23 The poorest 50 percent of all Americans now collectively own just 2.5% of all the wealth in the United States.
#24 The number of children living in poverty in the state of California has increased by 30 percent since 2007.
#25 According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.
#26 Since Barack Obama entered the White House, the number of Americans on food stamps has increased from 32 million to 46 million.
#27 As the economy has slowed down, so has the number of marriages. According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married. Back in 1960, 72 percent of all U.S. adults were married.
#28 In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger. Today, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.
#29 If you can believe it, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.
#30 After adjusting for inflation, U.S. college students are borrowing about twice as much money as they did a decade ago.
#31 According to the Student Loan Debt Clock, total student loan debt in the United States will surpass the 1 trillion dollar mark at some point in 2012. If you went out right now and starting spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
#32 Today, 46% of all Americans carry a credit card balance from month to month.
#33 Incredibly, one out of every seven Americans has at least 10 credit cards.
#34 The average interest rate on a credit card that is carrying a balance is now up to 13.10 percent.
#35 Of the U.S. households that do have credit card debt, the average amount of credit card debt is an astounding $15,799.
#36 Overall, Americans are carrying a grand total of $798 billion in credit card debt. If you were alive when Jesus was born and you spent a million dollars every single day since then, you still would not have spent $798 billion by now.
#37 It may be hard to believe, but the truth is that consumer debt in America has increased by a whopping 1700% since 1971.
#38 At this point, about 70 percent of all auto purchases in the United States involve an auto loan.
#39 In the United States today, 45 percent of all auto loans are made to subprime borrowers.
#40 Mortgage debt as a percentage of GDP has more than tripled since 1955.
#41 According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.
#42 To get the same purchasing power that you got out of $20.00 back in 1970 you would have to have more than $116 today.
#43 When Barack Obama first took office, an ounce of gold was going for about $850. Today an ounce of gold costs more than $1700 an ounce.
#44 The number of Americans that are not paying federal incomes taxes is at an all-time high.
#45 A staggering 48.5% of all Americans live in a household that receives some form of government benefits. Back in 1983, that number was below 30 percent.
#46 The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House.
#47 During 2012, the U.S. government must roll over nearly 3 trillion dollars of old debt.
#48 The U.S. debt to GDP ratio has now reached 101 percent.
#49 At the moment, the U.S. national debt is sitting at a grand total of $15,419,800,222,325.15.
#50 The U.S. national debt is now more than 22 times larger than it was when Jimmy Carter became president.
#51 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.
#52 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.
#53 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.
#54 Right now, the U.S. national debt is increasing by about 150 million dollars every single hour.
#55 Spending by the federal government accounted for about 2 percent of GDP back in 1800. It accounted for 23.8 percent in 2011, and according to former U.S. Comptroller General David M. Walker, it will account for 36.8 percent of GDP by 2040.
Bad news, eh?
But it isn't just our economy that is decaying.
We are witnessing a tremendous amount of social decay as well. As I wrote about the other day, America is rapidly decomposing right in front of our eyes.
When the water level of a river drops far enough, it will reveal rocks that have been hidden from view for a very long time. Well, a similar thing is happening in America right now. For decades, our debt-fueled prosperity has masked a lot of the social decay that has been going on.
But now that our prosperity is evaporating, a lot of frightening stuff is being revealed.
Unfortunately, another major financial crisis is rapidly approaching and economic conditions in the United States are going to get a lot worse.
So what is our country going to look like when that happens?
That is a very good question. theeconomiccollapseblog.com/archives/55-interesting-facts-about-the-u-s-economy-in-2012
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Bozur
Amicus
Posts: 5,515
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Post by Bozur on Mar 15, 2012 19:31:02 GMT -5
related America 1950 vs. America 2012
Would you rather live in the America of 1950 or the America of 2012? Has the United States changed for the better over the last 62 years? Many fondly remember the 1950s and the 1960s as the "golden age" of America. We emerged from World War II as the wealthiest and most powerful nation on the planet. During that time period, just about anyone that wanted to get a job could find a job and the U.S. middle class expanded rapidly. Back in 1950, America was still considered to be a "land of opportunity" and the economy was growing like crazy. There was less crime, there was less divorce, the American people had much less debt and the world seemed a whole lot less crazy. Most of the rest of the world deeply admired us and wanted to be more like us. Of course there were a lot of things that were not great about America back in 1950, and there are many things that many of us dearly love that we would have to give up in order to go back and live during that time. For example, there was no Internet back in 1950. Instead of being able to go online and read the articles that you want to read, your news would have been almost entirely controlled by the big media companies of the day. So there are definitely some advantages that we have today that they did not have back in 1950. But not all of the changes have been for the better. America is in a constant state of change, and many are deeply concerned about where all of these changes are taking us.
There has never been any society in the history of the world that has been perfect. America was flawed in 1950 just as America is flawed today.
But that doesn't mean that we should not reflect on how much things have changed over the past 62 years.
So which version of America would you rather live in?
America 1950 vs. America 2012 - you make the call....
In 1950, a gallon of gasoline cost about 27 cents.
In 2012, a gallon of gasoline costs $3.69.
In 1950, you could buy a first-class stamp for just 3 cents.
In 2012, a first-class stamp will cost you 45 cents.
In 1950, more than 80 percent of all men were employed.
In 2012, less than 65 percent of all men are employed.
In 1950, the average duration of unemployment was about 12 weeks.
In 2012, the average duration of unemployment is about 40 weeks.
In 1950, the average family spent about 22% of its income on housing.
In 2012, the average family spends about 43% of its income on housing.
In 1950, gum chewing and talking in class were some of the major disciplinary problems in our schools.
In 2012, many of our public schools have been equipped with metal detectors because violence has become so bad.
In 1950, mothers decided what their children would eat for lunch.
In 2012, lunches are inspected by government control freaks to make sure that they contain the "correct foods" in many areas of the country. For example, one 4-year-old girl recently had her lunch confiscated by a "lunch monitor" because it did not meet USDA guidelines....
A preschooler at West Hoke Elementary School ate three chicken nuggets for lunch Jan. 30 because the school told her the lunch her mother packed was not nutritious.
The girl’s turkey and cheese sandwich, banana, potato chips, and apple juice did not meet U.S. Department of Agriculture guidelines, according to the interpretation of the person who was inspecting all lunch boxes in the More at Four classroom that day.
The Division of Child Development and Early Education at the Department of Health and Human Services requires all lunches served in pre-kindergarten programs - including in-home day care centers - to meet USDA guidelines. That means lunches must consist of one serving of meat, one serving of milk, one serving of grain, and two servings of fruit or vegetables, even if the lunches are brought from home.
In 1950, the United States was #1 in GDP per capita.
In 2012, the United States is #13 in GDP per capita.
In 1950, redistribution of wealth was considered to be something that "the communists" did.
In 2012, the U.S. government redistributes more wealth than anyone else in the world.
In 1950, about 13 million Americans had manufacturing jobs.
In 2012, less than 12 million Americans have manufacturing jobs even though our population has more than doubled since 1950.
In 1950, the entire U.S. military was mobilized to protect the borders of South Korea.
In 2012, the U.S. borders with Mexico and Canada are wide open and now there are 1.4 million gang members living inside the United States.
In 1950, there were about 2 million people living in Detroit and it was one of the greatest cities on earth.
In 2012, there are about 700,000 people living in Detroit and it has become a symbol of what is wrong with the U.S. economy.
In 1950, the Dow Jones Industrial Average was slightly over the 200 mark.
In 2012, the Dow Jones Industrial Average is threatening to soar over the 13,000 mark.
In 1950, corporate taxes accounted for about 30 percent of all federal revenue.
In 2012, corporate taxes will account for less than 7 percent of all federal revenue.
In 1950, the median age at first marriage was about 22 for men and about 20 for women.
In 2012, the median age at first marriage is about 28 for men and about 26 for women.
In 1950, many Americans dressed up in suits and dresses before getting on an airplane.
In 2012, security goons look at the exposed forms of our women and our children before they are allowed to get on to an airplane.
In 1950, each retiree's Social Security benefit was paid for by 16 workers.
In 2012, each retiree's Social Security benefit is paid for by approximately 3.3 workers.
In 1950, many Americans regularly left their cars and the front doors of their homes unlocked.
In 2012, many Americans live with steel bars on their windows and gun sales are at record highs.
In 1950, the American people had a great love for the U.S. Constitution.
In 2012, if you are "reverent of individual liberty", you may get labeled as a potential terrorist by the U.S. government.
In 1950, the United States loaned more money to the rest of the world than anybody else.
In 2012, the United States owes more money to the rest of the world than anybody else.
In 1950, the U.S. national debt was about 257 billion dollars.
In 2012, the U.S. national debt is 59 times larger. It is currently sitting at a grand total of $15,435,694,556,033.29. Surely our children and our grandchildren will thank us for that.
One of the only things that is constant in life is change.
Whether we like it or not, America is going to continue to change.
Back in the 1950s and 1960s, about 70 percent of all American adults were married.
Today, only about 50 percent of all American adults are married.
We are more independent, less religious, more addicted to entertainment and more doped up on prescription drugs than Americans used to be.
We have a higher standard of living than Americans in 1950 did, but we are also drowning in an ocean of debt unlike anything the world has ever seen.
For a lot more on how the U.S. economy is doing in 2012, just check out this list of interesting facts.
So is America 2012 a better version than America 1950 was?
Have we made progress since then or are we going backwards?
Please feel free to leave a comment with your thoughts below.... theeconomiccollapseblog.com/archives/america-1950-vs-america-2012
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