| Note: This is Part 1 in a 6 part series called "The Retirement Conspiracy." Go to www.RetirementConspiracy.com to read the full series.
Part1: INFLATION
Most of us today consider inflation a "normal" part of life.
So, when planning for retirement, we consider it a given that we'll have to calculate for the amount of purchasing power that will be inflated away from our savings in the future.
Of course, you just "hope" inflation doesn't get out of control. And you "hope" your investments out-pace it. And you "hope" a series of other things happen in case things do turn sour…for example that bond yields will rise and interest rates rise if inflation gets too "over heated."
But have you ever just stopped to consider what a sick JOKE this is?
Think about it.
Right now a tiny handful of private bankers are sitting up there in Washington D.C. deciding how many 1s and 0s to punch into a computer – and their decision dictates how much value every dollar you hold loses tomorrow. And there's nothing you can do to about it.
Of course, one of the reasons they do this is to pay off their trillions upon trillions of dollars of debt. $23.3 Trillion to be exact.
That number is so large it's hard for the human mind to even fathom.
So let me paint you a picture.
One million seconds was about 11 days ago.
One billion seconds was 1989.
One trillion seconds ago was 30,000 BC.
Now multiply that by 23 and it ends up being 690,000 BC.
The Government loves inflation because it allows them to "poof" away their debt obligations by fixing interest rates, devaluing the currency, and paying off tomorrow's debts in today's dollar terms.
Sounds like a scam, doesn't it?
Of course none of this is your fault.
![The Retirement Conspiracy [Part 1]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_ttTeVDmiZlopi8iwf5CG3zySbkNPj1b0UMkkUji8-KiJRGIjNswoymlHHXm7J5vHhfyQXhkZxZBjJ4GSUpIZgiEDHDQbzKmUpmF8m0Uw=s0-d)
How curious that the Government decided to "change the rules" of how they report CPI after The Great Inflation of the 1970s…
…they also "changed the rules" of how they report unemployment after this (but that's another story).
Of course, as nefarious as all of this is…it's not really the worst part about the "Conspiracy" against retirees (or basically anybody who wants to be a fiscally responsible person who saves money and thinks about the future).
Because beyond the Government using inflation as a tool to inflate away their debts.
…It's also a tool to control your behavior.
Inflation Is Specifically Designed To Make Saving Your Money Useless – So You Have No Choice Other Than Spending It.
This is the real conspiracy of inflation.
The Fed…the Government…they don't WANT you to save your money.
They are actively trying to stop you from saving money. To them, saving money is "evil."
And they certainly don't want you to do any economically damaging things like think about the future by saving for retirement.
Because, you see, under "Modern Monetary Theory" or essentially Keynesian economics – people who save money and plan for the future are nothing but net parasites on all society.
Even though common sense would tell you that spending less than you make, thinking carefully about the future, and refraining from making frivolous purchases is a timeless method of responsible living…
… this doesn't serve the best interests of the "Powers That Be."
Keynesian economists (named after John Maynard Keynes, a man who had never studied economics or researched it professionally…but who told Governments all over the world what they wanted to hear, which is that they can print money forever with zero consequences as long as they walk a magical tightrope) call it "The Paradox of Thrift."
The basic premise of the entire theory is that high rates of personal savings are detrimental to overall economic growth.
In other words – you must spend your money… spend it often… and never, ever stop spending it.
So, how do they incentivize people to spend their money endlessly almost as soon as they get it and never think about or plan for the future?
Inflation.
What is the point of saving your money if it essentially has a built-in self-destruct mechanism?
If the longer you hold on to your money, the more it loses its value – it's essentially a rotting piece of fruit.
It's like that browning banana in your kitchen fruit bowl.
You might not be particularly hungry….but why let the banana go to waste?
You may as well go ahead and eat it before it goes bad.
That's similar to how inflationary policies incentivize you to spend money – because a dollar today is worth more than a dollar tomorrow and the cost of living keeps rising, you may as well just go ahead and spend it TODAY rather than tomorrow.
You may think that's an outrageous claim.
But if you really want a sneak peak into how important it is for Governments and central bankers to STOP you from saving – just look at what's going on in China with their Digital Yuan.
As reported by The Wall Street Journal…
"The money itself is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump start."
In other words – if you don't spend your money fast enough…it will disappear.
Bear in mind that every major country is now experimenting with Central Bank Digital Currencies (CBDCs) including the United States Federal Reserve.
Make no mistake: This is the goal.
"The Powers That Be" are terrified of you saving money, so they purposefully destroy the value of your currency (and would LOVE to do what China is doing, which is even turn it into a ticking time bomb with an expiration date) so that you spend it as fast as you get it.
This is the central tenant of the "Retirement Conspiracy" from which everything else flows…
All Economic Policy Is Intelligently Designed To STOP You From Saving
So what are they – the folks at the top of this conspiracy – so terrified of?
Well, they're scared that the most evil, dreaded, catastrophic consequence known to mankind may emerge if people actually save their money….DEFLATION!
A terrible situation in which prices go down and your money is worth more.
…wait a second.
That doesn't sound too bad, does it?
In fact – isn't the central tenant of all human progress and technological innovation to essentially get more for less over time?
Machines help us produce more goods and services at lower costs, for example.
Breakthroughs in various synthetics help us make more products out of less raw materials.
Better cars help us go further and further on less and less gas (and now, less and less battery energy).
Smaller chips with more processing power allow us to get greater computing power in smaller, more portable forms.
In other words – progress and technology by definition are deflationary.
They allow you to get MORE stuff, with LESS energy output, human labor, and money.
Productivity goes up, costs and energy output go down.
Money is also a technology (like anything else).
Money, in fact, is similar to the technology of writing.
What is writing as a technology? It is the ability to take one's thoughts and store them in a way that can be transferred over time and space…preserved forever in its original form.
This changed the course of human history forever. You and I can still absorb the thoughts, feelings, experiences, and knowledge of people who lived THOUSANDS of years ago because the technology of writing allowed them to preserve those thoughts and transfer them throughout time.
Money is similar.
Money is a mechanism in which you can store the energy produced by your labor over time and space and even exchange it for goods and services in the future as well.
Yet, imagine if there was a "rule" that your thoughts should have an expiration date.
So you're only allowed to write your thoughts down on a special Government-provided paper that will begin fading year after year, until it's so faded nobody can read what you wrote anymore.
That's essentially what Government – and the Fed – are saying MUST happen to the technology you rely on to store the value of your labor.
And it's all to stop the "evil" of deflation – in which prices go down and your money buys more for less.
In fact – imagine that for a moment.
Imagine that, instead of having to grow your income from $50,000 a year to $60,000 over the next few years in order to keep up with the cost of living…
…you could actually make LESS money in five years and buy MORE with it?
In fact, imagine how your habits would change.
Instead of going out and buying things that become completely outdated or defunct in a year, you'd probably demand that the items you purchase can be upgraded in perpetuity.
Instead of exchanging your money for cheap Ikea furniture, perhaps you'd only be willing to exchange your money for furniture that is built to maintain its use and functionality for as long as the money would.
After all, if your money is going to be worth the same, or more, in 20 years – you'd want the furniture you just exchanged it for to have similar lasting qualities.
So if you've ever wondered why "They just don't build it like they used to" – that's the reason.
If you're wondering why we turned into an over-materialistic pre-packaged, cardboard pop-up throwaway culture – you can largely attribute it to bad money creating an incentive for people to only think in terms of a few days or weeks, rather than years or decades.
Yet, the greatest uninterrupted global growth and prosperity of the last 300 years occurred between the years of 1850 and 1914.
By any measurement, the 19th century was far more prosperous than the 20th century.
We had greater economic growth, living standards rose at a higher pace than in the 20th century.
And it all happened in a deflationary environment on the gold standard (basically a Good Money standard in which the money you make maintains its value over time and space).
And under this deflation, the greatest American fortunes were accumulated.
The 30 richest self-made Americans of all time – adjusted for inflation – only 3 out of those 30 were born after the Civil War and of those three, there's only one that was born after the second world war.
So the "evil" of deflation that the Fed says they're trying to "save" you from is nothing more than a pathetic scapegoat to justify their desire to continue printing endless amounts of liquidity to serve their own purposes.
And here's the thing…
 This Is Nothing New – Ask Sung Dynasty China As the saying goes, "There's nothing new under the sun" and neither are Keynesian Economics or MMT (Modern Monetary Theory).
You need only to look at the first culture to ever use paper currency – Sung Dynasty China.
Originally created by tea merchants in A.D. 750, paper currency was used as a way for merchants to deposit their large, heavy stores of iron in one location and carry the value represented as promissory notes to another location, where they could then withdraw the iron there.
They called this novel idea Fei-chi'ien or "Flying Money."
Eventually the Sung Dynasty decided to take over Flying Money, decreeing, "IT would have a useful stabilizing effect if private notes were abolished and official ones produced in their plane."
So on January 12, 1024 the Sung court began printing official national paper money.
At first, 100% of notes in circulation were backed up by precious metals in reserves. This is what the Sung Dynasty promised the people.
But then in 1077 the Sung Dynasty's very own version of John Maynard Keynes whispered into the emperor's ear a clever little plan that – today – would be called "Modern Monetary Theory."
Here is what then Minister of Finance, Shen Kua, said…
"The utility of money derives from circulation and loan-making. A village of ten households may have 100,000 coins. If the cash is stored in the household of one individual, even after a century, the sum remains 100,000. If the coins are circulated through business transactions so that every individual of the ten households can enjoy the utility of the 100,000 coins, then the utility will amount to that of 1,000,000 cash. If circulation continues without stop, the utility of the cash will be beyond enumeration."
And so it began…
Eventually the Sung Dynasty began printing more notes into circulation than was backed up by physical metal in the reserves.
It first dropped to 29% (similar to how the dollar dropped to 35% in reserve after Bretton Woods).
Then they cut the cord all together to 0% and began printing endlessly (similar to what Nixon did in the early 1970s by taking the dollar completely off the gold standard).
Within 100 years the currency collapsed to zero.
![The Retirement Conspiracy [Part 1]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sdR74sf5Aqiojp8rWP-lMCdVBNHGL61fdy4f-838iJuj-qmJb2O_5GPnrUIlUSF9FREwG_O9pSUdfAgNjRXDsD4pNzFplv5mKcau1KJ2U=s0-d)
However, they weren't the first.
As author Ralph T. Foster explained…
"Over the course of 600 years, five dynasties had implemented paper money and all five made frequent use of the printing press to solve problems. Economic catastrophe and political chaos inevitably followed. Time and time again, officials looked to paper money for instant liquidity and the immediate transfer of wealth. But its ostensible virtues could not withstand its tragic legacy: those who held it as a store of value found that in time all they held were worthless pieces of paper."
Here's the fact: No government in all of human history has succeeded in printing itself to prosperity…although nearly every one of them have tried.
Governments always begin debasing their currencies and encouraging people to spend as much as they can (and not hoard) because that's the only way their scheme can continue working.
In every case it fails.
It's not just paper currency. Britain for example had a very successful "Tally Stick" system for centuries, in which money and records of transactions were recorded by splitting a stick down the middle.
In the beginning those sticks were backed up by gold, later they weren't and the system collapsed.
King Henry VIII was nicknamed "Old Coppernose" because he devalued the currency so much that all that remained on the coinage was a thin layer of silver. Underneath that silver was nothing but copper.
With King Henry's portrait on the coinage, his protruding nose would be the first to have the thin layer of silver rubbed off revealing the copper underneath. Hence "Coppernose."
Of course the Romans did the same thing. Then the Byzantines after them.
It's difficult to find any historical example in which a Government did not fall prey to the siren song of endless money printing and currency debasement…each one under the idea that they had cracked a "code" and would be able to do it forever without consequence.
…just like the famed Alchemist turning lead into gold.
So What Is The Solution To This Retirement Conspiracy?
First of all, I can't tell you how to invest.
But what I'd say is, it's never a bad idea to buy some hard assets. That includes real estate, physical businesses, gold/silver, and so on.
Of course, stocks are still a solid way to invest as well (I'll get into that in Part 4).
Although these kinds of investments are solid – they DON'T make you an income!
And herein lies the issue.
If you have – let's say -- $25,000…what can you do with it?
Do you lock that money up by investing it? Although that will help save the value of the money from the ravages of inflation over time, it doesn't' exactly give you any cash income you can use NOW.
Do you just go spend it?
Well that's certainly what the Fed would like you to do.
But what if there was another way?
What if you could have that $25,000 savings….or $50,000….or $100,000 (whatever the amount) actually pay you a reliable cash income every single month?
An income that is ABOVE inflation.
That way, you can BEAT the "Retirement Conspiracy" by both saving money AND having it yield you an inflation-beating return that you can actually use (and even live on).
Believe it or not, you can do exactly that. And if you Go here you can learn how to get your money working for you, beating inflation, and paying you an income.
Of course, you may be asking yourself "Why can't I just put some of my money in a high-yield savings account and get paid interest?"
And that's a topic I'll go over tomorrow in Part 2.
Trade Wisely,
Jon Lewis
|
Post a Comment
Post a Comment