From 1971 - 2020, America has had fiat currency (left 'The Gold Standard').
US Government (Federal Reserve) has been printing money on a somewhat regular basis.
US Government (Federal Reserve) has been printing money on a somewhat regular basis.
Printing money inevitably leads to inflation.
Most of the inflation has gone into investment assets (Real Estate/Housing, Equities/Stocks).
Most of the inflation has gone into investment assets (Real Estate/Housing, Equities/Stocks).
This is a GOOD THING for rich people (since they own assets; they want asset prices to go up).
This is a BAD THING for poor people (since they don't own assets; asset prices going up means they'll never get the chance to acquire them at a low price).
This is a BAD THING for poor people (since they don't own assets; asset prices going up means they'll never get the chance to acquire them at a low price).
Age ties in to Wealth level with this (Old vs Young, ties in with Rich vs Poor, with this).
Old people already own assets (real estate, equities), young people don't.
Old people already own assets (real estate, equities), young people don't.
As such, the money printing leading to inflation driving up asset prices is GOOD for old people (since they own said assets).
It is BAD for young people (since asset prices going high means they'll never get the chance to acquire said assets at a low price).
It is BAD for young people (since asset prices going high means they'll never get the chance to acquire said assets at a low price).
If you are OLD AND RICH, you own lots of assets, so money printing inflating asset prices is GOOD for you; it boosts the value of your portfolio.
If you are YOUNG AND POOR, you own little to no assets, so money printing inflating asset prices is BAD for you; it makes it impossible for you to acquire assets at a low price.
In 1920s Germany (Weimar Republic), money printing lead to the currency becoming worthless overnight (hyperinflation).
In modern America (1970 - 2020), money printing has NOT lead to the currency becoming worthless (not hyperinflation).
However, money printing has led to inflation rates being high, and the inflation has mostly gone into Assets (Real Estate/Housing, Equities/Stocks).
However, money printing has led to inflation rates being high, and the inflation has mostly gone into Assets (Real Estate/Housing, Equities/Stocks).
For reasons listed previously, this has meant
Wealth Transfer From The Poor To The Rich (Stealing From The Poor To Give To The Rich)
and also
Wealth Transfer From The Young To The Old (Stealing From Millennials/Zoomers To Give To Baby Boomers)
Wealth Transfer From The Poor To The Rich (Stealing From The Poor To Give To The Rich)
and also
Wealth Transfer From The Young To The Old (Stealing From Millennials/Zoomers To Give To Baby Boomers)
"If Money Printing is hurting poor people to enrich rich people, why would the government do such a terrible thing!!????"
Who do you think wields more power over the decisions the Government (Federal Reserve) makes?
Old Rich People, or Young Poor People?
Who do you think wields more power over the decisions the Government (Federal Reserve) makes?
Old Rich People, or Young Poor People?
For the past 50 years (1970 - 2020), the American Government has been lying downwards about what the true rate of inflation is.
The Government tracks inflation based on the CPI (Consumer Price Index).
The Government tracks inflation based on the CPI (Consumer Price Index).
The CPI includes the price of things like Food.
The CPI *does not include* the price of things like Real Estate/Housing or Equities/Stocks.
The CPI *does not include* the price of things like Real Estate/Housing or Equities/Stocks.
Here's the thing...
Food prices have increased very little over the past 50 years.
Real Estate and Equities have *skyrocketed* in price, over the past 50 years.
Food prices have increased very little over the past 50 years.
Real Estate and Equities have *skyrocketed* in price, over the past 50 years.
Tracking inflation based on the CPI, means consistently underestimating the true rate of inflation.
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