Is Bitcoin Racist?
If there is still any doubt that inflation erodes purchasing power, let’s take a revered, orthodox central bank at its word, such as the Bank of England, which routinely refers to this erosion in their white papers:
“Real spot and forward rates The return on a nominal bond can be decomposed into two components: a real rate of return and a compensation for the erosion of purchasing power arising from inflation. “
Kansas City Fed chief Esther George said rather bluntly
I am not as enthusiastic or encouraged as some when I see inflation moving higher, especially when it has been driven by a sector like housing. Inflation is a tax and those least able to afford it generally suffer the most.
Or maybe that right-wing extremist Ben Bernanke, quoting that other demagogue, Irving Fisher
“As first pointed out by the economist Irving Fisher, interest rates will tend to move in tandem with changes in expected inflation, as lenders require compensation for the loss in purchasing power of their principal over the period of the loan”
Or even Alan Greenspan who as we all should know formerly ran the Fed…
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
Make no mistake: Inflation debases a currency. Everybody knows it, from pension managers and fiduciaries over to FOMC committee members and leftist heroes like Ralph Nader. The only difference is the degree to which those in the know are willing to discuss this in polite company. It takes an act of willful cognitive dissonance to believe otherwise.