So my wife wants a new super king size bed, with a vintage wooden frame, top of the line bedsheets, and solid gold pillows, and I tell her "no, we have to save our money." But then I see this graph, and I it makes me say "who the heck cares anyways."
This graph, from the Federal Reserve Bank of St. Louis, is stunning. What it shows is the nation's "adjusted monetary base," which is a good measure of the money supply, from the end of the First World War to the present. As you can see in the graph, over the last year, we have increased our money supply the same amount as we did over the last 30 years, and the line keeps pointing upwards, and Obama is only going to expand the money supply more. What I am saying is that over the last year and the next year, we will expand the money supply more than we have in the entire history of our country up to this point. What does that mean, especially with relation to my wife wanting a new bed?
It means inflation. Money works on supply and demand, just along with everything else- if the supply of goods remains the same, and the amount of money increases, you will need more money to buy those goods- ie, inflation. Food, gas, heat, electricity, consumer goods, and cars will all become more expensive. If your paycheck doesn't go up too, the end result is that you will be poorer.
The result of this type of government policy is to destroy savers and reward debtors. People who have large mortgages, massive credit card bills, car loans they can't afford, etc- they will win out with this policy. People who have investments, save their money, own their house, etc- they will lose with this policy. The amount of money that they have earned, saving and sacrificing over their entire lives, will be worth less as money is worth less. People who have been irresponsible, who have been selfish- the amount of money they owe will be worth less, and so they will owe less. This government policy represents yet another way to transfer wealth from the productive and responsible members of society to the unproductive and irresponsible members- and the worth and wealth of our society will be less because of this.
Even so- I'm still going to do the right thing, and live within my means. In spite of the fact that the government is attempting to corrupt my morals, is attempting to bribe me into being irresponsible- in spite of the fact that government policy is working counter to the aims of a good and decent society- I will defy government, I will stand up to government, and I will use my diminishing liberty and freedom to save my money and do the responsible thing and say no to the gold pillows.
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