Why Everything Gets More Expensive Over Time
What we must realize and see in context is the nature of money and what it really is today... for without a clear understanding, we will always blame other people and circumstances without really being able to clearly identify the cause of so much grief in the world.
Someone said this and he was spot-on ( simplified in bold ):
"All the perplexities, confusion and distress in America arise, not from the defects of the Constitution or confederation, not from want of honor or virtue, so much as from the downright ignorance of the nation, of coin, credit and circulation."
-- b. A.D. 1735 John Adams, 2nd President of the United States of America.
Inflation ( things getting more expensive ) happens because there is more money in circulation than the value of 'things' upon which the money is supposed to reflect!
Think of it like this: Picture an empty room with a carpenter, some wood and a person wanting a doll house made by hand with $550 in their pocket. The other person desires to have a doll house built by hand and commissions the carpenter to build them one out of the wood in that room.
The wood's 'cost' or 'value' in the marketplace is $50 and the 'work' or 'labor' of a good carpenter is $100 a day, which would make the doll house's cost $550. They both agree on the price and the carpenter goes to work.
Now imagine if, on day three... someone outside the room who is in charge of the circulation of money and rules regarding money simply printed $1M in money out of thin air, without the creation of anything to support that $1M ( one million dollars ).
Both the carpenter and the other person are the type to keep a keen on eye on things, now realize that the wood now costs $60 and the labor is now worth $120 per day.
By day five, the carpenter asks for $660 to adjust for the extra $1M floating around town... and this is accurate because of the balancing out of equal weights and measures. But unfortunately, the other person who has the $550 now realize they cannot purchase the doll house... they will have to somehow bring an extra $110, which they do not have.. remember, they only have $550.
Either the carpenter must lower his price ( and thus lose money / value in their work / eat the cost of the wood / work for free one day, etc )... or the buyer must go home and pull money out of savings ( if they have any ) or wait until they earn more money however they earn it.
You see the dilemma.
This is why those who understood what it meant to 'bail out' the banksters and other companies was such a bad idea... but to those who do not understand these fundamental principles of the world we exist in, simply went along with those who decided to print more money out of nothing and subject everyone not being bailed out to a downhill road to poverty.
Here is a real world scenario; one you can look up and read for yourselves:
Napoleon chopped off the French king's head because the king began printing money to fund wars and adorn his palace, now a museum called 'the Louvre.' By printing more money into existence, it devalued the money already in circulation ( the money already worked for and earned by the populous ) and everyone became poorer. All goods and services became more expensive and thus all heck started breaking loose once the population of France began to realize the rising costs of all things... yet their incomes / wages / savings didn't reflect the rise.
The very same thing is happening today.. not only since the bailouts, but for almost two centuries now.
First off, the money you and I must labor to attain in order to pay for things like the rent, food, etc... is actually a debt instrument!
It is not an asset as Constitutionally it is supposed to be, but debt.
Hard to conceptualize at first, but to help you I put together a website about all this madness and tom foolery to hopefully explain what is really going on ( at the SmartPeopleSmartMoney.com site ).
The effort is from my own energy, time and passion ( my 'work' ), so please be kind to support the ad sponsors ( or sift them, however you want to look at it ) on that site or here on this blog in order to support the effort of informing / educating the populous about money, what it is and what it isn't... and how to move forward from our present economic slavery.
Thank You!
Someone said this and he was spot-on ( simplified in bold ):
"All the perplexities, confusion and distress in America arise, not from the defects of the Constitution or confederation, not from want of honor or virtue, so much as from the downright ignorance of the nation, of coin, credit and circulation."
-- b. A.D. 1735 John Adams, 2nd President of the United States of America.
Inflation ( things getting more expensive ) happens because there is more money in circulation than the value of 'things' upon which the money is supposed to reflect!
Think of it like this: Picture an empty room with a carpenter, some wood and a person wanting a doll house made by hand with $550 in their pocket. The other person desires to have a doll house built by hand and commissions the carpenter to build them one out of the wood in that room.
The wood's 'cost' or 'value' in the marketplace is $50 and the 'work' or 'labor' of a good carpenter is $100 a day, which would make the doll house's cost $550. They both agree on the price and the carpenter goes to work.
Now imagine if, on day three... someone outside the room who is in charge of the circulation of money and rules regarding money simply printed $1M in money out of thin air, without the creation of anything to support that $1M ( one million dollars ).
Both the carpenter and the other person are the type to keep a keen on eye on things, now realize that the wood now costs $60 and the labor is now worth $120 per day.
By day five, the carpenter asks for $660 to adjust for the extra $1M floating around town... and this is accurate because of the balancing out of equal weights and measures. But unfortunately, the other person who has the $550 now realize they cannot purchase the doll house... they will have to somehow bring an extra $110, which they do not have.. remember, they only have $550.
Either the carpenter must lower his price ( and thus lose money / value in their work / eat the cost of the wood / work for free one day, etc )... or the buyer must go home and pull money out of savings ( if they have any ) or wait until they earn more money however they earn it.
You see the dilemma.
This is why those who understood what it meant to 'bail out' the banksters and other companies was such a bad idea... but to those who do not understand these fundamental principles of the world we exist in, simply went along with those who decided to print more money out of nothing and subject everyone not being bailed out to a downhill road to poverty.
Here is a real world scenario; one you can look up and read for yourselves:
Napoleon chopped off the French king's head because the king began printing money to fund wars and adorn his palace, now a museum called 'the Louvre.' By printing more money into existence, it devalued the money already in circulation ( the money already worked for and earned by the populous ) and everyone became poorer. All goods and services became more expensive and thus all heck started breaking loose once the population of France began to realize the rising costs of all things... yet their incomes / wages / savings didn't reflect the rise.
The very same thing is happening today.. not only since the bailouts, but for almost two centuries now.
First off, the money you and I must labor to attain in order to pay for things like the rent, food, etc... is actually a debt instrument!
It is not an asset as Constitutionally it is supposed to be, but debt.
Hard to conceptualize at first, but to help you I put together a website about all this madness and tom foolery to hopefully explain what is really going on ( at the SmartPeopleSmartMoney.com site ).
The effort is from my own energy, time and passion ( my 'work' ), so please be kind to support the ad sponsors ( or sift them, however you want to look at it ) on that site or here on this blog in order to support the effort of informing / educating the populous about money, what it is and what it isn't... and how to move forward from our present economic slavery.
Thank You!
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