Posted on 08/14/2021 2:18:56 PM PDT by Browns Ultra Fan
The purchasing power of the US Dollar has been virtually erased since the creation of The Federal Reserve in 1913 when $1,000 in 1913 is now worth $36.36. And M2 Money Velocity (GDP/M2 Money) has crashed and burned to the lowest level in history.
Inflation? Home price growth YoY is the highest in history. And CPI growth YoY is the highest since the Financial Crisis and July 2008.
The Fed is predicted to ease its foot off the printing press in the latter half of 2022.
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(Excerpt) Read more at confoundedinterest.net ...
The message is clear. Don’t keep your nest egg under the mattress or some savings account. Buy and hold assets that appreciate - which is just about everything else.
IOW, make lemonade out of the lemons being handed to us!
A set up to means test social security? All the baby boomer home owners are now sitting on tons of home equity.
https://www.inflationtool.com/us-dollar/1990-to-present-value?amount=100000
So paying taxes on inflated price increases causes an even greater loss of purchasing power.
Is why min wage increase is such a fraud. Puts people in a tax bracket while goods prices go up to compensate for wage...
Big government loves inflation for us and high dollar for them.
Would not be surprised if out there is a secret currency for them
And Xiao Xiden wants to tax you on that unrealized gain.
For decades, if you bought a primary residence and it soared in value, the capital gain was wiped to zero when the first of you died. The surviving spouse could sell the asset and pay no capital gains tax.
Xiden wants to get rid of that long-established “basis step-up” rule. Long-time homeowners in high appreciation areas are going to get wiped out as will theirs heirs.
This was one of the best tax breaks for the ordinary little guy. But Dems and Xiden HATE the little guy and are desperate for money to give away to their core constituency while wiping out the middle class.
Inflation is in the system. It’s systemic. It is no accident. It is caused deliberately by federal policy. They cannot avoid the temptation to steal from the money that people are holding.
This is particularly insidious for the people whose working days are over. What they saved is being sucked dry by the government.
To them that is a feature not a bug.
The big push for $15 dollar min wage (and those before), telegraphed the gov’s inflation intent.
Inflation is a tax.
It is intentional/pre-meditated destruction and redistribution of wealth.
Totally agree with you.
Based on the expansion of the money supply inflation is going to become higher than even the Carter years and last for at least a year.
Right on!
Under the “federal reserve” system, money supply can only expand with the printing of more dollars, which are debt, which are “federal reserve” IOU’s.
Inbother words, the genesis of the Dollar is literally as debt for distribution, (also impacting velocity of money).
While the planing and pushing was coming for decades in advance, this system is most definitely left wing, and Wilsonian architecture.
Apologize for the spelling and grammar errors.
Don’t worry, when $500 and $1000 bills go back in to circulation next year,we will all be Rich!
” So paying taxes on inflated price increases causes an even greater loss of purchasing power.”
How so? And definitely not compared to having put that 100K in a savings account yielding next to nothing.
When I sell my house in 2021 I have 200K tax free if it’s my private residence.
How much do you have in the bank in 2021 if you left your 100K there the whole time? Don’t forget to subtract the taxes you paid on the interest every year.
The mistake in that article is that it assumes that the interest rate the bank gives is the same as the inflation rate. That’s hardly ever the case. Over the past 20 years the savings interest rates have been next to nothing while inflation has run over 2%. It is the house that pays the inflation rate.
Even assuming that you’ve been getting an average of 1.5% on your saving, today you would have about 155K MINUS the taxes you had to pay on that interest.
So with the house you now have 200k, at the bank you have less than 150K. So you’re ahead with the house just on that basis.
But there is more...by buying the house, you lived there rent free, whereas if you had left the 100K in the bank and rented a place, all that rent money is gone.
You’d be way, way ahead if you bought the house.
You’d be even way aheader if you had bought the S&P 500 with that money. Over the past 30 years the S&P has returned over 10% a year. If you had put you’re 100K there, today you would have over 1.7 MILLION!
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