It wasn’t long ago that there were no billionaires, merely millionaires, and not many of them. The 2013 Forbes List has 1426 people named as billionaires. What happened?
Inflation happened. It’s not that there are so many more rich people, there aren’t. It’s that the value of money has dropped so drastically.
If you’re over 50, then you probably remember when gasoline at the pump was under 50 cents a gallon and that you could buy an ice cream cone for 10 or 15 cents instead of $1.50. If you had a fortune of $100 million then, say, 40 years ago, and had it invested in real estate, you saw your one hundred million turn into one billion without you lifting a finger, because the average home cost in 1973 was about $30,000 and today it’s over $300,000 for the same house.
Our honest government, who would never ever ever lie to us, has an inflation calculator which has been graciously and generously provided for us citizens on the Internet using our money, and it says that something that cost a dollar in 1973 would cost $5.26 now. Really? Is that right? Then why have homes gone up over 10 times? Gas was only 39 cents a gallon in 1973. It was 35 cents the year before but our inflation rate for 1973 was over 6% and boosted the price of gas up another 4 cents a gallon, along with boosting the price of everything else, of course. Gas was costing around $4 a gallon this past summer, as it did last year, which is ten times higher than in 1973. It’s down again for winter but we all know it will rocket up even higher next summer.
The primary cause of inflation is the printing of money. As long as all money was in the form of metals, prices were forced to stay pretty much the same except for those things that were most needed that sometimes were in short supply. Then for them, the price would increase until supply could meet demand again. Everything else stayed the same, simply because the supply of gold, silver and copper was limited. Once money started being printed on presses, inflation took off with a roar as governments simply printed all the money they wanted for all the wonderful new projects they envisioned, along with all their salary increases, of course.
Supply and demand is only a secondary cause of inflation, and with supply and demand, when the demand goes down, so does the asking price. Inflation is always temporary when there is only supply and demand. Inflation is permanent when governments print money, which is why their inflation figures always lie along with the reasons they give.
The only part of inflation I don’t get is why, as the value of our money spirals down to zero like a moth burnt in a flame, does our government keep increasing the difficulty of counterfeiting it? Back when a dollar was really a dollar, copying our money was easy. Now that the value is nearly gone, they’re making the copying of it a technological nightmare and if they get much more so, it will soon start costing more to make a dollar than one is worth. Hmm. Maybe then we could go onto a gold standard? I’d settle for a rutabaga standard. Anything is better than nothing at all.