Robbing the Old to Pay the Rich-A classic
Sol Palha: Financial & Economic Insights Robbing the Old to Pay the Rich

Robbing the Old to Pay the Rich

Robbing the Old to Pay the Rich

“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

Nothing changes, Robbing the Old to Pay the Rich is still in Vogue

The Senate boldly and blatantly refused to give 57 million elderly individuals $250 more. The story below highlights this point. This one sentence very nicely encapsulates our theme line of  Robbing the Old to Pay the Rich

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.

Social Security payments for the elderly and disabled will stay flat this year for the first time since 1975 because they are tied to consumer prices, which decreased amid the worst economic recession in 70 years.

That follows a year in which payments rose by 5.8 per cent, largely due to a spike in gasoline prices. “It is wrong to turn our backs on seniors in this moment of economic difficulty,” said Independent Senator Bernie Sanders, who sponsored the amendment.

But Republican Senator Judd Gregg pointed out that the bill would defeat the purpose of indexing Social Security payments to inflation. “The law says it shouldn’t be given,” Gregg said. At least 10 Democrats agreed with Gregg and joined 40 Republicans to defeat the proposal. Full Story

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 definition of Inflation

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.

No inflation, Seriously!!

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 needs to 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 lend billions of dollars to bank 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., etc

Precious metals and Inflation

Gold one of the best measures of inflation is up roughly 400% from its lows. If we were in a low inflationary environment the price of Gold would not have risen so much. Oil is up over 800% from its lows and not too long ago was up almost 1400% from its lows. The average person’s salary has not increased enough to consider inflation. All one has to do is look at the price of homes, even after a pretty strong pull back, the average Joe cannot afford to buy a decent home in many parts of the country on his salary. In the old days (the 1950’s) 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 this money 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 would hit this mark well before the decade is over.

Hard assets protect you against the evils of Inflation

The best hedge against an inflationary environment is to be in hard assets. That means anything that cannot be mass-produced or just created; almost anything to do with the commodity’s sector, for example, Gold and Silver bullion. If any of the individuals today who are on fixed incomes 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 and would not be entirely at the mercy of the very same individuals who created this mess in the first place.

The best way to protect yourself from the evil 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 perfect handmade suit, 100 years later one Gold coin can still buy the best handmade suit, and if you go to Asia, it will buy even more. Can one say the same for 1 dollar?

“Nothing in the world is more haughty than a man of moderate capacity when once raised to power.” ~ Baron Wessenberg

Other Articles of Interest

Solar Storms  (Aug 20)

The divide between rich and poor grows (May 18)

High unemployment levels here to stay as some jobs are never coming back (May 14)

World’s 1st Gold ATM; is this a sign of Top? (May 13)

Euro; the worst is yet to come (May 12)

Strategic mortgage defaults the next time bomb (May 11)

Large insider transactions; a sign all was not well at Moody’s (May 10)

Health overhaul could cost 115 billion more (May 10)

Euro shock and awe package more like Shock and shake (May 10)

Beat inflation at its own game  (May 10)

The necessity of losing and why it makes sense and cents (May 7)

The dangers of Quant Trading models; Dow’s 1000 point drop a prime example (May 7)

Precipitously low market volume a sign that a correction is imminent (May 5)

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