“People who treat other people as less than human must not be surprised when the bread they have cast on the waters comes floating back to them, poisoned.” ~ James Baldwin, 1924-1987, American Author
Central Banks Prime Directive
A measure to give some 57 million elderly people, veterans and persons with disabilities a $250 check was rejected by the Senate on Wednesday, a setback for the powerful seniors’ lobby.
Under normal circumstances, I would have just ignored this story and moved along, but when I read the statement that is boldfaced above I felt I had to say something. The dim wits in Washington would not know what inflation was if it hit them right in the face and then drove over them.
The real and only definition of inflation is an increase in the supply of money. It is not defined as in an increase in price as so many economists love to proclaim falsely. The money supply has gone ballistic, our national debt has doubled in the last ten years, and we continue to create money and a mind-boggling rate. Therefore, inflation has not disappeared, its pace has continued to increase, though the effects of inflation have not always manifested themselves immediately (price increases); based on this simple fact these individuals should not be getting $250, they should be getting between $600-1000. The masses are being blindly robbed via this silent Killer tax, otherwise known as inflation.
If Senator Judd and everyone who voted against this bill felt that we have no inflation, why are they are not lowering their salaries to compensate for this so-called low inflationary environment? It will be a cold day in hell when anyone in Congress voluntarily takes a pay cut. Senator Bayh was right; every incumbent should be kicked out and replaced with new blood; while not the perfect solution, it will send a message to these guys that it’s time to do something. When you bite the hand that feeds you, you are doomed to lick the boot that kicks you.
To add insult to injury after increasing the money supply, the Feds then lent billions of dollars to banks all of which played a huge part in making a bad situation even worse. The Feds inflate the money supply and then freely give this money out to individuals who don’t need it but those who need it have a hard time even getting $250 bucks.
We can see the effects of inflation everywhere; Higher gas prices, higher heating prices, higher rents, cost of basic staples increasing, etc.
Central Banks Prime Directive: How to protect yourself
Gold is one of the best measures of inflation is up roughly 350% from its 2003 lows. If we were in a low inflationary environment, the price of Gold would not have risen so much and this is after the massive correction it has suffered. For the record, we got out of Gold almost right at the top in 2011 and moved into equities. We follow the trend and not the noise – No market trends up forever. Gold will rise again but until the trend turns positive we are not in a rush to embrace the precious metals sector.
The average person’s salary has not increased enough to take inflation into consideration. All one has to do is look at the price of homes, even after a pretty strong pullback, the average Joe cannot afford to buy a decent home in many parts of the country on his salary. In the old days (the 1950s) if one saved enough one was assured of being able to purchase a decent home.
We spend money defending other nations and trying to promote peace and justice in the world. Why can’t we spend some of these funds on individuals that need it? Where is the justice there?
What will Congress have to say when Gold eventually trades past the 2000 mark and then hits the $3000 mark? They are now projecting that our national debt will surge past $30 trillion; at the rate, we are spending, we could hit this target within the next 6-8 years.
The best hedge against inflation is to be in hard assets, but one has to make sure one is an inflationary environment as the Fed has twisted the definition of inflation. The new definition that the masses have fallen for is that Inflation is an increase in price. In reality, inflation is an increase in the money supply; price is only the effect of the disease.
What are hard assets?
Briefly, it is anything that cannot be mass-produced or created; almost anything to do with the commodity’s sector, for example, Gold and Silver bullion. If many today’s fixed income individuals had put aside a bit of extra money and deployed this into Gold and Silver bullion, they would be in a far better off than they are today, Even, after the substantial pullback, both markets have suffered.
Taking it one step further they could have chosen healthy stocks to invest their money into, waiting for adamant pullbacks to occur before committing fresh money to the market. This simple technique would have produced a fortune from a small amount of money. Mass Psychology is the most important tool you can master when it comes to trading the markets. We have an extensive section dedicated to exploring this concept and it will significantly speed up your understanding and mastery of the subject. If you have the time, it would be time well invested.
Simple Strategy to build wealth and protect yourself from the evils of inflation
The best way to protect yourself from the harmful effects of inflation is to live 1-2 standards below your means; the money saved should be put in investments that will hold their value over time such as Gold or silver. Over 100 years ago one Gold Coin purchased a great handmade suit, 100 years later one Gold coin can still buy the best handmade suit, and if you go to Asia, it will purchase even more. Can one say the same for 1 dollar?
However, one can make even more if one focusses on trends and gets into the right stocks and the right time.
“Nothing in the world is more haughty than a man of moderate capacity when once raised to power.” ~ Baron Wessenberg