The Government does not want you to understand the effect of 2% inflation. 2% may not sound like much but it ADDS UP!
The US Government is gradually wiping out the National Debt through inflation. This is not only here, it is everywhere. Each year it costs less in Real Dollars to repay the National Debt. That’s a good thing, right? Not so fast. People who have saved their money and invested in the debt with 2% inflation will each year lose 2% of the value their savings. Who benefits from this loss? The Government. It is like a tax.
After 10 years your Dollar is worth 82 cents and after 20 years it is worth 67 cents in today’s money and your savings will have lost 1/3 of its value. Same thing with the National Debt. After 20 years the National Debt has been reduced by 1/3! The Government wins and you lose. Sounds like a tax to me.
OK you may say, this does not apply to me! I am smart I have investments, not cash. Oh yes! It applies to you! There is no escaping! Say you have an investment that over 20 years has gone up 49% in value, an “increase” in value of 2% each year while in fact there is no true gain at all, NONE! You sell it and collect a so-called gain of $49. Great! But guess what? Now Uncle Sam will tax this gain even though the gain is not real! (There may be exceptions.) You have no real gain at all – because the Dollars you get are worth less. Yet the Government is taxing this illusory gain. The Government wins, you lose.
Inflation is a HUGE GAIN for the Government at YOUR LOSS.
Still can’t see that inflation is a form of taxation? Want to talk about it, lets meet for coffee!