Taxation by Inflation

Inflation is a hidden and intentionally deceptive form of taxation. Governments love to be off the gold standard and use fiat currencies that allow them to inflate without controls (especially when all the other governments are also on fiat currencies).

Inflation of the money supply is what the Fed does. When the government needs more money it sells assets to the Fed (usually government securities). The Fed “invents” the money to pay for these. It doesn’t need to print new money because the transaction just increases the amount of money the government has in the bank (and it can use to pay people with).

Because of this new money in the system, all of your money is worth less – increased supply of money raises prices (that’s why housing prices have risen so high after cash was pushed into the housing market through easy loans).

You have now been taxed twice. The government takes a high percentage of your money out of your paycheck. It may give a little back on April 15. It has also taken more of your income by making what you have left worth less. This is a hidden, deceptive tax. The Fed does not protect from inflation, it causes it.

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  1. Pingback: Nixon and the Gold Standard – the Great Lands

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