We reveal the secret tax the government is hiding from us! We also talk the misunderstandings of inflation and all it's complexities. We also help you learn more with key inflation-related terms, such as deflation, disinflation, and hyperinflation, clarifying that hyperinflation occurs when public trust in a currency is lost. And we also argue that inflation is influenced not just by money printing, but also by the velocity of money—the rate at which money circulates within an economy.
We discuss...
- Government-published CPI (Consumer Price Index) is the gold standard for measuring inflation, but there may be incentives to manipulate it.
- Shadow Stats shows inflation metrics based on older CPI calculations, suggesting a higher inflation rate than reported.
- Historical inflation rates in the 70s and 80s were much higher than today's target of 2%, challenging the notion of what's considered "normal."
- Money velocity is key to understanding inflation, as low velocity can counteract the effects of money printing.
- New money creation typically leads to inflation.
- Consumer price inflation visibly increases the price of goods and services, reducing purchasing power.
- When wages don't rise alongside prices, it squeezes the middle class and working class, making them poorer.
- Quantitative easing leads to asset price inflation but not consumer goods inflation.
- Stimulus checks and COVID relief caused consumer price inflation by increasing the money supply.
- Globalization has caused deflation by reducing the cost of goods.
- Technological advances are deflationary by making products cheaper and more efficient.
- Declining populations can lead to deflation, which worries governments with debt-based economies.
- Immigration helps prevent population decline but has complex economic and cultural implications.
- Despite recent inflationary spikes, the current trend is toward disinflation.
- U.S. debt has grown dramatically, with the annual increase accelerating in recent years.
For more information, visit the show notes at https://moneytreepodcast.com/secret-tax-651
Today's Panelists:
Kirk Chisholm | Innovative Wealth
Douglas Heagren | ProCollege Planners
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