Inflation is the central economic fact of the 20th century. Why? Because in the 20th century, currencies were disconnected from gold and silver. Governments around the world institutionalized "fiat currency," through the creation of central banks, and the result has been inflation. The chart above shows inflation in the US over the last two centuries. Note the huge spike after the establishment of the Federal Reserve System--a US central bank--in 1913.
To put it bluntly, once governments figured out that they could print money, they did. And the US was no exception.
The same 20th century institutions are still in place for the 21st century. So why should the 21st century be any different, inflation-wise?
As they say, "To hold paper is to trust politicians." And as we can see, that's a mistake.
No comments:
Post a Comment