Your grocery bill just hit $200 for what used to cost $120. Your rent jumped again. Gas prices are doing that thing they do. But don’t worry—the Fed says inflation is “under control.”
Here’s what they’re not telling you: inflation isn’t some mysterious economic force like the weather. It’s not “corporate greed” or “supply chain issues” (though those can make it worse). Inflation is a policy choice. And like most government policies, it benefits some people while quietly screwing everyone else.
Let me explain inflation in terms that don’t require an economics degree—because the people making these decisions are counting on you not understanding how the game works.
What Inflation Actually Is (Spoiler: It’s Not Rising Prices)
Here’s where everyone gets it wrong, including most economists. Inflation isn’t rising prices. Rising prices are the symptom of inflation.
Inflation is the increase in the money supply. When the Federal Reserve creates new dollars out of thin air—which they do by typing numbers into a computer—they’re diluting the value of every dollar you already own.
Think of it like this: You’re at a poker table with four friends. Everyone has ten chips. Then the house dealer walks over and hands one friend twenty more chips, but doesn’t add any more money to the pot. That friend didn’t get richer—he just got a bigger share of the same pie. Everyone else’s chips are now worth less.
That’s exactly what happens when the Fed “stimulates” the economy. They hand new money to banks, governments, and politically connected corporations first. By the time that new money works its way down to your paycheck, prices have already adjusted upward.
“The first punchbowl gets you drunk. The second one makes everyone else pay for your hangover.”
The Cantillon Effect: Why Timing Is Everything
Richard Cantillon figured this out in the 1700s, and it’s still true today. When new money enters the economy, it doesn’t affect everyone equally. The people who get it first benefit. Everyone else pays.
Wall Street gets the new money first through cheap loans and quantitative easing. They buy up assets—stocks, real estate, bonds—before prices rise. By the time you see the effects at the grocery store, they’ve already positioned themselves to profit from the inflation they helped cause.
Meanwhile, you’re working the same job for the same nominal wage, but everything costs more. Your savings account earning 0.5% interest is getting destroyed by 6% inflation. You’re not just falling behind—you’re being robbed in slow motion.
Why They Want You to Think It’s Complicated
The government has every incentive to make inflation seem mysterious and inevitable. They trot out PhD economists with complex models to explain why 2% inflation is “healthy” and “necessary.”
Here’s the real reason they want inflation: it’s the most regressive tax ever invented, and nobody votes on it.
When the government spends more than it collects in taxes, it has three options:
- Raise taxes (voters hate this)
- Cut spending (politicians hate this)
- Print money and let inflation tax everyone (nobody connects the dots)
Guess which one they choose?
Inflation hits the poor and middle class hardest because they spend most of their income on necessities—food, housing, transportation. Rich people hold assets that inflate along with the currency. Poor people hold cash that gets worth less every year.
“Inflation is taxation without representation. At least King George had the courtesy to ask.”
The War Connection Nobody Talks About
Notice how inflation always accelerates during wartime? That’s not a coincidence. Wars are expensive, and governments can’t fund them through taxes alone without causing revolts.
So they print money instead. The current situation with Iran is following the same playbook we’ve seen for decades. Defense contractors get paid in freshly printed dollars. You get to pay for it through higher prices at the pump.
Every missile costs $2 million. Every drone costs $20 million. Every “surgical strike” costs billions. Where do you think that money comes from? They don’t have a vault full of gold somewhere. They create it digitally and send you the bill through inflation.
It’s the ultimate government program: spend unlimited money on things voters never approved, and make everyone pay for it through a hidden tax they don’t understand.
What You Can Do About It
You can’t stop the Fed from printing money. But you can stop holding their increasingly worthless paper.
Assets that hold value during inflation:
- Real estate (they’re not making any more land)
- Commodities (oil, gold, silver, agricultural products)
- Bitcoin (fixed supply, no central authority)
- Skills and education (human capital appreciates)
- Productive businesses (they can raise prices with inflation)
Assets that get destroyed by inflation:
- Cash and savings accounts
- Bonds (especially long-term government bonds)
- Fixed-rate annuities
- Any investment that promises “safety” through dollar denomination
The Real Question
Here’s what nobody in Washington wants you to ask: Why should anyone have the power to devalue your labor by printing money?
You worked forty hours this week. You earned those dollars through productive effort. Some bureaucrat you’ve never met clicks a mouse, creates a trillion new dollars, and suddenly your work is worth less. How is that different from theft?
The Founding Fathers knew this. That’s why the Constitution says only gold and silver can be money. They’d seen what happened when governments control the printing press. They’d lived through the inflation of the Continental Currency and watched it become worthless paper.
“Not worth a Continental” wasn’t just a saying. It was a warning we forgot.
Same rules for everyone—that’s all any of us should be asking for. But as long as some people can create money while others have to earn it, the rules will never be the same.
The real question isn’t whether you can protect yourself from inflation. You can. The real question is whether you’re ready to stop pretending the people causing it are trying to help you.
Scrivener.PRO 