Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Inflation: Civilization’s Death Spiral

  by    0   0

The cost of living continues to ratchet up in the United States.

You don’t need me to tell you this. You probably feel the squeeze in your own wallet. As Peter Schiff pointed out in his most recent podcast, the average wage rate has gone up 2.7% in the last year. Meanwhile, the Consumer Price Index (CPI) has increased by 2.9% during the same period. The CPI almost certainly understates the cost of living, but even if you take that number at face value, Americans are losing ground.

Most people accept inflation as “part of life.” But why? Why do prices steadily increase? As Nick Giambruno put it in an article published by the International Man, “This is all a predictable consequence of the US abandoning sound money.”

By every measure—including stagnating wages and rising costs—things have been going downhill for the American middle class since the early 1970s. August 15, 1971, to be exact. This is the date President Nixon killed the last remnants of the gold standard. Since then, the dollar has been a pure fiat currency. This allows the Fed to print as many dollars as it pleases. And—without the discipline imposed by some form of a gold standard—it does precisely that. The US money supply has exploded 2,106% higher since 1971. The rejection of sound money is the primary reason inflation has eaten up wage growth since the early 1970s—and the primary reason the cost of living has exploded.”

Looking at US hourly wages priced in gold vividly shows just how much ground Americans have lost since the US government abandoned sound money.

Measured in gold, US wages have dropped by 84% since 1971.

By the same measure, the US minimum wage has dropped by 87% since 1968. The problem isn’t that politicians won’t raise the minimum wage. The problem is that politicians and central bankers have destroyed the value of your money.

Giambruno said he believes the spiraling cost of living will drive the US toward more socialist government policies. And that will only exacerbate the problems.

This is why millennials and millions of others are gravitating toward socialism. They feel the economic pain of inflation every day. They know it’s becoming harder and harder to maintain a middle-class lifestyle. They just don’t understand why. So, they succumb to the siren’s call of freebies. Perverse as it is, the policies demanded by people suffering from inflation create even more inflation. Inflation has a way of perpetuating itself. The more inflation reduces living standards, the more people push for programs that create even more inflation. This includes things like universal basic income and a higher minimum wage… which in turn creates a cycle of inflation.”

Giambruno calls inflation “Civilization’s Death Spiral.”

  1. In a fiat currency system, the government will invariably print an ever-increasing amount of currency.
  2. This makes prices and the cost of living rise faster than wages.
  3. The average person feels the pain but doesn’t understand what’s happening.
  4. More people support politicians who promise freebies.
  5. In order to pay for the “freebies,” the government prints more money.
  6. This creates even more inflation, and the cycle repeats.

If you want to see the logical conclusion of this cycle, look no further than Venezuela.

Can the US break the death spiral?

That possibility seems remote. When you factor in entitlements, government wages and outright handouts, more than 50% of the US population depends on government money.

The growing majority of people who depend on the government guarantee that socialist policies will continue and likely accelerate. It’s why Bernie Sanders and his ilk are growing in popularity.”

If we can’t break the death spiral, what can we do? We can at least prepare ourselves for the inevitable consequences. Because at some point, the system will become unsustainable. Giambruno offers this advice. Buy gold.

Owning some physical gold is step one. This is something everyone should do. Gold is the ultimate form of wealth insurance. It’s preserved wealth through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.”

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Nearly Half of Small Business Owners Expect to Close Down Permanently

The economy was booming. The stock market was setting records. Then coronavirus came along and governments shut things down to minimize the pandemic. That led to massive layoffs and a nasty recession. But once states open up, things will spring back to life and the economy will go back to being great again. That’s the […]

READ MORE →

Over-Leveraged Zombie Companies Threaten Economic Recovery

There seems to be mounting optimism that the US economy will rebound relatively quickly as states begin opening up and there is progress toward a coronavirus vaccine. But the optimism ignores deep problems in the US economy that existed before the pandemic  – chief among them staggering levels of debt and the proliferation of zombie […]

READ MORE →

Silver Joins Gold at the Party

Silver has finally joined gold at the party. In the last week, the price of the white metal has moved up from $15.51 to $17.35. (as I type this on Tuesday morning May 19) That’s an 11.9% increase. With the jump in the price of silver, the silver-gold ratio has dropped from over 113-1 earlier […]

READ MORE →

QE Infinity: Money Supply Grew at Record Rate in April

The money supply growth rate surged to an all-time high in April as the Federal Reserve created cash at an unprecedented rate through quantitative easing and other money-creating monetary policies. According to Ryan McMaken at the Mises Institute, the only time the Fed has come close to this level of money creation was in the […]

READ MORE →

Staggering April Budget Deficit Just the Tip of the Iceberg

The April federal budget deficit came in at a staggering $738 billion as government coronavirus stimulus began flowing through the pipelines and revenue dipped due to the government lockdowns.

READ MORE →

Comments are closed.

Call Now