Have you heard of the serious domestic threat flanking your household affairs, and has been for decades?
Is inflation important to you?
If not, it must be. I promise it will be by the end of this week's edition!
Rather listen on the go? 11 minutes at 1x (only 5:30 minutes at 2x!)
The problem with the mainstream headlines and general discussion about inflation topics is that inflation is an extremely complex matter. There is nothing simple about it. But the talking heads on the free news sources make it appear to be simple.
The alternative information sources, however, get to the root of the truth...and I've learned from them for nearly two years now. It's time I share all I've learned with you, to help the #militaryfamily and #transitioningmilitary #servicemmbers go faster through the Transition Battlefield Landscape...in fact, to fly over it all together!
Beware who you're listening to about these matters.
It's the gravest threat to your Liberty .
Please understand that the term inflation has a hundred different definitions depending on the context of a discussion.
The Connection to Previous Editions
The inflation discussion must start with understanding the particular "area" being considered in the economy (consumer prices, financial assets, supply of "stuff", e.g.). For our purposes, this introduction to inflation links back to the discussion on Efforts and Energy in Edition 4 of the series, and we'll continue dive bombing the LIEs around inflation in the next few KnowledgeBombs for Military Transition Infoletter editions!
As previously discussed, in most cases we trade our time and energy for currency via a paycheck from a job. It's what the academic schooling and societal brainwashing have conditioned the vast majority to do, and it's not your fault. The same thing happened to me, and I was upset for a minute when I found out...then I got over it, and got to work.
That happened to me in the Summer of 2020. I started learning in an unstructured manner, and will prevent this audience from taking the same winding path. We'll guide you through getting up to speed fast so you can more quickly get to a point to make informed decisions and protect yourself. So let's get on with it!
So by now you're likely asking,
"How does my efforts and expended energy relate to 'inflation'?"
Uncle Sam...He's Scamming!
[PAY YOUR TAX]
Consider what the federal government did in 2020 and 2021: It created between 25%-40% of all currency ("U.S. Dollar") units ever created...out of thin air to "help" the population. And you were excited to "get richer."
But what did the creation of those new currency units ("a.k.a. dollar bills") do to the "value" stored in the currency unit you previously earned, and perhaps saved, for being productive at work?
That's right! It devalued the dollar you'd previously earned (through whatever means), therefore allowing your earned and/or saved dollar to purchase fewer goods and services (you need more currency units to buy the same amount of "stuff.")
Recall from previous editions: "Wealth" at it's core is the efficient production of goods and services, and societies access to them. We can have all the currency we want, but if there's fewer goods and services to buy with the currency, then what good is it?
And here's another question to ponder: If drunk, insolvent Uncle Scam can issue as much debt as he wants and have the Federal Reserve print all that's needed to buy that debt, why is an income tax on your efforts and energy (paychecks) required (set aside the fact that Congress was duped into passing the income tax law in 1913)? We'll dig into this in future editions, so keep it in mind! For now, let's consider an example.
A Simple Example
Consider the economy a closed system, "inside a box."
There's a set amount of "stuff" in that box. So long as the amount of currency inside the box remains the same, prices remain "stable." Let's say there exists $100 in the box chasing ten products. Those one-hundred dollar bills will chase those ten products depending on the demand for each product, and the supply of them, too.
The one hundred dollar bills going toward each of the ten products inside that box will rise or fall based on supply and demand. But before we continue, an important distinction must be addressed:
Currency Unit Terms
Side note about the currency unit.
Currency topics are actually a "debt instrument" discussion.
Bare with me, because this is extremely important, although very dry, I know. If you've invested in the stock market through any type of retirment savings plan, it's even more applicable.
In the debt instrument market (where currency units reside), there are "bills," "notes," & "bonds."
"Bills" are of short duration on the order of four weeks up to 12 months.
"Notes" are mid-term duration from 2-10 years.
And "bonds" are long duration debt instruments and mature from 20-30 years.
"Dollar Bill" LIEs and Debt Instrument Truths
The "dollar bill" is slang for what's actually the Federal Reserve Note, which is a debt instrument (see the definition of note above) meaning it's a liability to the Federal Reserve System and "matures" in the 2-10 year timeframe...it is not a "bill."
Don't blindly trust me in a vaccuum on this. Take a look at what's written on the currency yourself...it's right under our nose!
The banks "store" your Federal Reserve Note as a liabilty owed to you upon demand, except that there exists laws in place that put the third-party risk (banks holding your paycheck or savings) on your shoulders. Under certain circumstances, the bank doesn't have to give you the currency units you've stored in their coffers. It's in a law from the 2011 timeframe.
All the while they're paying you pennies on the dollar to use your savings, and the value of that savings is eroding away!
Now someone decides it's a good idea to pop open that box lid, and dump another $20 into the box (increase the currency supply by 1/5, or 20%), and shut the lid. That's what they gave you in the form of stimulus checks in 2020 and 2021. There's $120 total in the box now, up from $100.
The same amount of products exist. No change to the product line(s) or the quantity increased. No incentives to produce more goods and services are given to the producers in that economy. The consumers are encouraged to keep on spending (it's party time!!!).
So what happens to the costs for the products available in the box?
That's right! They soak up the additional currency circulating inside. Those products cost more currency units than they did previously. Said another way, it takes more currency units to buy the same amount of products (goods or services).
See, if the amount of currency increases without a similar increase in production (of goods and services in the economy) then the prices of all that stuff will increase to soak up the additional currency. Explicit, blatant taxes such as income and sales taxes, can increase to soak it up, too, but that's another discussion all together!
Again, this is so important that I'll repeat what was said above.
This means each individual currency unit becomes less valuable, because it takes additional currency units to purchase the same amount of goods and services (or products). This is the insidious, hidden inflation tax caused by expansion of the currency supply without a similiar increase in production of goods and services.
This decreases "how far" your hard-earned dollar will go in the economy.
Each "dollar bill" purchases less stuff.
You probably heard recently that “inflation” from February was at 7.9% year over year (the March calculation is released on April 12th), which means it’s being compared to the February 2021 CPI calculation.
Referring to this as inflation, however, is actually incorrect.
Recall, in the Liberty Accelerator, the words we're using, they matter.
Inflation is the expansion of the currency and credit supply in the economy.
The 7% number being referred to in the headlines is a Consumer Price Index calculation, one small piece of a very big, complicated pie. Price changes result from inflationary pressures. They are not one in the same.
There’s another price index, the Producer Price Index, that’s used on the production side where products and services are created. To keep this broad for those listening in for the first time, that’s the “Supply-side” calculation of the economics supply and demand model.
CPI and PPI Connection
The Consumer Price Index represents the demand side at the retail level…where you and I shop in the big box retailers and online marketplaces.
But on the other end of the spectrum, the Producer Price Index reached 10% in February compared to the Consumer Price Index (CPI), which rose to 7.9%. What does that mean for CPI in the future? Well, expect consumer prices to rise as producers raise their prices to cover their increased costs.
The Government's Take
But see, these are the government reported cost index increases. Good arguments show these calculations skew the actual price pressures we’re all feeling to the downside.
The government's social spending programs, including miltiary veteran pensions and Active Duty military annual pay raises, are based on a similar CPI number (it's called the Chained Consumer Price Index, and it doesn't benefit us), not our individual true cost of living increases.
And that's all that matters to you and me. Many "in the know" refer to it as the CPLie. It's a marketing gimmic by the bureaucrats and academics in the Federal Reserve System, the U.S. Treasury, and Wall Street (who owns the media, btw).
This CPI calculation EXCLUDES, I say it again, EXCLUDES, housing and energy costs…the two biggest costs in your budget each month…well, aside from the blatant and obvious taxes of all types (income, sales, property, e.g.), but that’s for next time!
Inflation is a complicated topic. Don't let headline, lamestream, discussions fool you.
The words being used in the "inflation" discussion are extremely important. Don't believe the LIEs, and seek the truth.
The words we're using during discussions about "inflation" matter greatly. Be certain you fully understand the "inflation" being referred to when listening to people discuss these matters. I lost five months in my self-education not knowing the definitions and understanding the subtle differences underlying the "inflation" discussion and the words surrounding it.
So, what else have you learned recently about the insidious "inflation" tax and how is it impacting your household decision-making?
And what bomb would you like to drop next on the matter?
Let me know in the comments!
To Your Liberty,
P.s. Check out the daily posts from this week's LinkedIn activity for additional insights on the tax burden stripping away your Liberty and throttling back your Freedom. Consider subscribing on the LinkedIn InfoLetter page, too. We’re building community over there, and need your insights!
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Published • 5m
Contrarian Thinking, Liberty Style --> KnowledgeBombs for "Military Transition" Edition 5 is on the street. Here's why it's important:
Two documents will light the brushfires of Freedom buried deep within. They've been neglected, set aside, and taken for granted...until now.
It begins with the Constitution of the United States.
Don't forget the Declaration of Independence, too.
They'll awaken that sleeping lion.
The sheep need you. Right now.
Begin with this fifth edition of the KnowledgeBombs InfoLetter (shared in this post).
Then go back and get caught up with the first four editions (audio available for listening on the go).
Reach out and let's connect...for real.
DM me and let's get on a call.
The offer is standing...it's up to you to engage.
I'm doing my part for Liberty.
Now it's your turn!
Let's hear that roar.
To Your Liberty,