Writers from at least since 1810 through the early 1920s understood well what inflation means. However, today, few do. Most don't understand what is inflation because most don't understand banking and the financial system under which they live.
As I wrote in FALLACY FRAUGHT FORBES TRIES TO STOKE FEARS OF HYPERINFLATION, inflation is the growth of credit that outstrips the growth of output owing to credit being priced too cheap.
The residential realty bubble of the 2000s renders a classic example of inflation. House prices soared because bankers created too much bank credit for everyone to buy houses.
And until the profit squeeze, which always happens during inflation leading to crisis, Americans could flip, re-fi, move up into ever bigger houses. Crisis came when incomes no longer could pay for taxes of all kinds (income, sales, property) as well as living expenses and mortgages.
Americans know that something is wrong at the bedrock of American life today. Americans whose adulthood journey began in the 1980s can tell you this is so.
If you were to work for the average hourly wage, how many minutes would you need to work to buy X where X is a gallon of gasoline, a gallon of milk, a kilowatt hour of electricity, a pound of burger meat and so on? Using the 1980 average wage worker and how many minutes, hours and days that worked needed to work to gain products, how do average wage workers of other years since compare to the 1980 average age worker?
The tables of the embedded spreadsheet tell you these answers. This spreadsheet captures what Americans know about America.
Have a listen as I explain how to understand the numbers and how to understand your reality, perhaps for the first time.
Who knew that with these jokers:
1999 from PRINCE on Myspace.
