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copperbullion
Penny Pincher Member
Australia
136 Posts |
 Posted - 01/08/2008 : 22:35:25
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THIS ARTICLE IS A REALCENT FORUMS EXCLUSIVE!
What Causes Inflation, And Why Is There A Shortage Of Money?
That’s easy! It’s the government printing fiat money right? Well yes that’s part of the reason, but there is another more sinister reason for the constant rise in inflation. It has to do with the way our money is created. As many readers know the money is created out of thin air via the magic of printing presses. I actually don’t have a problem with this if the money was created by our governments and spent into the economy funding roads and hospitals etc for the populations benefit, but it is not! It is created by private banking powers for the sole purpose of profit. If it was created by governments, there would be no need for income tax at all! The “money powers” took control of the creation of American currency with the Federal Reserve act of 1913. These money powers have had control of the creation of money in Europe for centuries and their plan was to control money creation worldwide. After world war two, (which was started by the money powers through financing Hitler) the money powers snared control of another 23 nations (including Australia) through the infamous “Bretton Woods” agreement in 1947.
So what else causes inflation and why is there always a shortage of money? When the money powers create money, they create it as a loan at interest! So here is the catch, they create the money for the loan, but DO NOT create extra money to pay back the interest!
THIS MEANS THERE IS NEVER ENOUGH MONEY IN THE WORLD TO COVER PRINCIPAL AND INTEREST PAYMENTS! (Which causes bankruptcy)
So another major cause of inflation is companies and individuals chasing money to pay back loans. Businesses raise prices to make a “bit extra” and this causes a chain reaction through out the economy. Wouldn’t you like an extra bit of cash to help pay those mortgage or credit card interest payments?
The whole “game” can go on for centuries through rising asset prices and “the greater fool” principal. That principal goes like this, you buy a house, 10 or 20 years later your house has doubled in value, and you find “a greater fool” to buy your house at the higher price. (borrowed from the money powers at interest of course). Eventually the whole scheme will collapse, when everybody has borrowed to the hilt, and can no longer afford the interest payments. There will be an almighty crash! I have been reading financial articles for over 20 years and every year or two, there are stories about the coming depression. Do I think that there maybe another depression? Well yes, but I don’t know when! Irrational markets can stay afloat a lot longer than the average speculator can. So what can be done? Well on a global scale, there is unfortunately not much the individual can do! But on an individual scale, plenty can be done.
1. Reduce debt (Only having one credit card is a good start)
2. Buy tangible assets –Gold, Silver and Copper among others.
3. Do not buy unnecessary consumable items. (That plasma screen can wait)
4. Don’t worry if your friends call you crazy. (I’ve been crazy for years)
5. Don’t borrow to buy your precious metals as this will only put pressure on you to sell them later.
Even if you have next to no “spare” money, you can still buy copper and silver for prices that in the future will be considered give-away prices!
It’s time to protect yourself and your family… starting now!
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Edited by - copperbullion on 01/09/2008 01:41:49 |
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Ryedale
Administrator
USA
523 Posts |
Posted - 01/09/2008 : 04:52:14
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| Nice article, Thanks Copperbullion. |
Ryedale
GET YOUR DRI-SLIDE FROM IRONBRAID
http://www.ironbraid.com/driside.html
Used with permission from Ironbraid.
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"The real art of conversation is not only to say the right thing at the right place, but to leave unsaid the wrong thing at the most tempting moment."
— Dorothy Neville-Rolfe |
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copperbullion
Penny Pincher Member
Australia
136 Posts |
Posted - 01/09/2008 : 05:06:00
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| Thanks Rydale... I appreciate the support! |
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tmaring
Penny Collector Member
USA
302 Posts |
Posted - 01/09/2008 : 08:24:18
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The Five Points of Financial Freedom
Nice Job on the article!
I have long believed in reducing debt. We bought a very modest place and paid it off ahead of schedule in order to procure a secure homestead. I have always believed in never buying anything on credit... if I don't have the money I just don't buy it, if I want it bad enough I'll save up. For a long time I eschewed the very idea of a credit card as an immorality. Then i found that you can no longer buy plane tickets, rent cars, or get a motel room without one! So... I have a couple, but pay them off every month.
Tangible assets, especially tools, equipment, and materials that can be put into production. Books on how to do things, make things, grow things. Intangible assets like skills. When the crash comes (and I've been expecting it for 20 years now) there will be lots of people around with zero useful skills. Your skill set is your greatest asset and the one that cannot be stolen from you.
Consumer toys merely distract us from the task of preparing ourselves for the future. Instead of shoot-em-up video games (which prepare kids only for cannon-fodder) they could be playing with working scale model backhoes and bulldozers, learning a skill set that will pay good money.
There are many fundamental reasons why a crash MUST eventually come. You can discuss the situation as a population dynamics issue, or a resource-base problem, an infrastructure problem, or an energy problem. Any way you look at it the current situation is unsustainable. There are only two ways down off an unsustainable path... either you take careful stock and endure some hardship while you find a way down... or you take a fall. The collective "we" of the world appears to scarcely recognize that there is a problem at all. In such a case it is encumbent upon smaller groups and individuals to cut loose and find your own way before you are dragged into the abyss with the fools. The fall could be bad.
This board and forum provide a valuable resource for like-minded folk to gather and discuss such things!
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Tom Maringer
Shire Post Mint
Springdale, Arkansas |
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fiatboy
Administrator
912 Posts |
Posted - 01/09/2008 : 13:54:45
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Great article, copperbullion.
And great comments, too.
Here's a classic real-world example. As you all know, 1964 was the last year that U.S. dimes were made of silver. In 1964, three silver dimes could buy you a gallon of gas---a gallon of gas costing $0.30 back then. Today, a silver dime from 1964 is worth about $1.10 (metal value). Gas prices vary by location, but guess how many silver dimes it takes it buy a gallon of gas today? Same as 1964. Three silver dimes still buys a gallon of gas. |
"Bart, it's not about how many stocks you have, it's about how much copper wire you can get out of the building." --- Homer Simpson |
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 01/09/2008 : 16:06:29
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| Great post. An economy based on constant growth fueled by borrowing is doomed to grind to a hault someday. What was the Fed. smoking when they decided not to print their own fiat money?!? |
starwarsgeek171 |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 01/09/2008 : 17:41:47
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| Great thread in general. IMO, we can't have too many like it around here. |
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Think positive. |
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n/a
deleted
8 Posts |
Posted - 01/09/2008 : 20:58:48
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| Solid advice. Three silver dimes for a gallon of gas, then and now... I hadn't realized that, but you're right! |
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THIS ARTICLE IS A REALCENT FORUMS EXCLUSIVE!
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