In 2006-2007 the office received an across the board pay increase due to some extra funds. But also note the economic downturn in 2009-2010. Office ran into a little bit of trouble and had to cut back.
Why am I bringing this up? Over the course of 6 years, the salary at my current position went up over 20%. On average that is a rate of 3.5% increase per year. If this is a reflection of the rate of inflation then putting money in a savings account making less than 3.5% a year interest means you are actually losing value on your money.
What do I mean by that?
For example: If I saved $500 a month in the bank that gains <1% return over 30 years, I would have about $200k (or less depending on actual rate of return). Not bad you think. But not good either. At the rate of inflation, that $500 would have a real future value of about $300k meaning that we would have lost about 1/3 of its value due to inflation. In other words you lost $100k by just letting your money sit there. Where did your money go? In short, the government took it. In long, the government took it.
TAXES, TAXES, and MORE TAXESTwo ways the government can tax the people. One is to raise income tax. But this is very unpopular especially with those making money. The second and more hidden way is to increase money supply. They can do this by selling debt to foreign countries (like China). By "creating" more money, governments can fund many MANY programs, stimulate the economy, fund WARS, etc. etc. etc. but in doing so they decrease the real value of their currency.
Why would the government want to decrease the value of its own currency? Two reasons. It makes its debt cheaper. If you owed 10 Trillion dollars it's easier to print a 10 Trillion dollar bill than to outright tax your citizens 10 Trillion dollars.
That leads to the second reason. Most people don't realize what's going on. Ignorance is bliss. When a large percentage of the population receives subsidies, welfare, tax rebates, social security or other "government monies". Who are we to complain? My yearly salary increase keeps my happy. I'm making over 50% of what I was making 5 years ago. Everything is going OK, right?
Well, the thing with inflation, messing with the money supply, More and more debt... we are playing with fire. I don't know how to solve this problem. Fiscal austerity, higher production, raise retirement age, encourage debt reduction, I don't know. Everyone thinks they know the solution. Nothing is "popular." When we talk about losing weight, when we talk about budgeting, cutting programs, these words/phrases are very unpopular. Everybody wants a cut or a piece of the pie. Everyone has an interest they do not want to give up. Nobody is willing to sacrifice... and because of that, the only people sacrificing are those who have saved. I don't know. I just know if we continue on this route the end results will match that of Zimbabwe with hyper-inflation and hundred trillion dollar bills... meaning the couple thousand dollars I have saved in the bank is worthless. This happened in South American countries, Germany after WWI, and countries in Africa, etc. etc.
QUESTIONSHow do we preserve capital? Where should we then invest? Gold, Silver, Copper, Oil and other commodities? Real estate and our homes? Stocks and other companies? or should we invest in countries that will escape the crisis: Switzerland?
Is all this meaningless? Can we place our trust in our elected officials to lead us? We have a lot of HARD work to do in the next 20-30 years. If we don't change, we will be saddling our CHILDREN and our CHILDREN's CHILDREN with a huge DEBT and HIGH INFLATION. We will not be leaving them an INHERITANCE.
I'm sounding like those GLOOM and DOOM crackpots on TV and the RADIO. What I do know is this: It starts with one person. That's how a leader leads. That's who a LEADER is. Others will follow when they realize this is the RIGHT THING TO DO.
Change that mattersI think Jesus was right. The only way to lead a revolution is if you are willing to LIVE and DIE for it. How do we as a nation change? How do we as citizens of the world change? It'll happen one person at a time. That's the only way.
With that I'm optimistic. If one person can change, two people can change. If two, then four. If four, then more. So it starts right here. Not my blog, but my HEART.
What kind of change do I need to have? I need to change my views on money, my views on people, my views on being a citizen of this world (not just as an America), my views on LIFE. It starts with a right view of how things work... This is what I must learn all over again... and this is what I need to teach my children. One person at a time.
This is the inheritance that cannot be purchased with money and this is the education you cannot learned in school. We'll look at some of these changes we personally can do as individuals, as a family, as a community... in the next few weeks... hopefully.