Inflation results from policies implemented by governments, commercial banks and central banks.
A Few Consequences
Gary Christenson – More currency placed into circulation devalues all currency units. We can thank fractional reserve banking, deficit spending and QE.
1- Stock markets rise as each currency unit buys less.
2- Commodities rise in price.
3- Incomes, taxes, debt and government expenditures rise.
4- Politicians spend more currency units as they reward friends and buy votes.
5- The wealthy become richer and the poor and middle class suffer as prices rise while wages stagnate. More stagflation is coming in 2018 – 2020.
6- Inflation discourages savings and encourages spending and debt creation.
Examine official national debt and M3 currency in circulation at ten year intervals on a log scale for a big-picture perspective.
Both debt and M3 have risen exponentially for decades. Inflation is a policy decision that benefits bankers and politicians, so it is not surprising the political and financial elite promote policies that encourage currency devaluations and inflate consumer prices.
The Stock Market and Silver
Both rise as currency units purchase less, and both fluctuate while rising in their long-term uptrends.
Calculate average monthly prices for the DOW and silver over a ten-year period. Plot those prices on the center date of the period. This shows long-term trends and eliminates most market fluctuations.
Example: Take the average price for the DOW each month from January 1, 1969 through December 31, 1978 and plot it as a single data point on January 1, 1974 (five years into the ten-year interval).
The DOW and silver prices have risen exponentially for over 50 years with occasional spikes higher and lower.
The upward exponential trend is clear. Until financial systems change, stocks and commodities will rise as bankers devalue currencies. These exponential increases in debt, M3, the DOW and silver prices can’t continue forever, but how long it will take before the system resets is unknowable.
SF Source Deviant Investor Aug 2018