4 Things that Make People Poor: #3- Inflation

Inflation is a thief to everyone. It is a thief that make most of us poor.

Inflation is simply means raising in price of goods especially the commodities such as oil, grain and rice. Another words, inflation make the value of every dollar you have in your pocket worth less. Every time, when we heard government is increase their budget, launch new social benefit program, hire more government servant during the recession, promise the citizen that there will be less taxes but more benefit to the society, they are in the context of hiring inflation. Why? Because, those program and promises are expensive, someone has to pay for it. Since there will be no additional taxes on the people, how they get the money? The answer is, they simply print it. They are printing pseudo money and flood the market. Yes! It is legal for the government to do that. In most case they called it minting. Since our current monetary system is fiat currency, it is the money back by the government, not the hard asset backing on it. So, as long as government can impose delusion to the community that they are strong and capable to pay back any debt, the currency of that country will be valid regardless how much they printed.

But the problem is when there is too much money is printed. The private sector simply could not supply or produce goods as fast as the money is printed. There are so much money suddenly being introduced in the market, making the market felt a delusion of rich. The market now can buy more goods. Yet, since the goods supply is constant, commodities could not be created (ie. gold, silver is god made money), demand of goods & commodities is now higher (since people now have more pseudo paper money printed by government), the market self-regulated law - demand & supply will automatically adjust the price for every goods higher. Since, most money that is newly printed by the government are often goes to the riches, inflation do not much have impact to them. But to the poor, who are employee or self-employed, working hard and saving hard, they money value is diluted by inflation. Every single dollar they have, is worth less, even the amount is never lost. The stuff they could buy is less than what they could buy years back. They are getting poorer the most they save. Interest rate of 1% or 2% given by the back are less than the inflation rate. Their money is been stolen every time the government increase the money supply. This is why the government do not need to taxes you, since they could take it from you by simply printing more! This is why most people now are getting poorer and poorer.