Inflation

 
 

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens”

- John Maynard Keynes


 
 
What exactly is inflation and how does it effect someone’s money? The simple explanation is that inflation decreases the value and buying power of a currency. This means that it requires more of your currency to buy the same thing after inflation than before inflation. So if your money is not prudently secure in something of value that increases equal to or greater than inflation, then your money is actually worth less over time. Interest rates at bank generally do not outpace inflation, and, in fact, are less than inflation. Thomas Jefferson once said:
 


“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations will grow up around them and will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

- Thomas Jefferson, 3rd President of the United States


 

Inflation can become very dangerous. So what can you do? First, learn more. Knowledge is key to any good investment. This is a rather complicated topic that can be broken down. Read a break down of inflation, how inflation works and how inflation influences your money and the economy as a whole.


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