VIDEO: Inflation

For close to 300 years, inflation in the US remained very subdued. Small spurts occurred around major wars (Revolutionary, Civil, WW1, etc), but after each, inflation quickly trended back down to its long-term baseline. If you lived during this stretch of time, your money had roughly the same purchasing power your great-grandfather’s did.

But something changed after inflation spiked yet again during World War 2. With the permanent mobilization of the military industrial complex and the start of the decades-long Cold War, combined with a related acceleration in government deficit spending, inflation did not come back down. It remained elevated, and in fact, rose further.

That is, until the “Nixon shock” in 1971, when the dollar’s remaining ties to gold were severed. Then inflation EXPLODED. And the inflationary moon-shot has continued since, up to present day.

So, we’ve become used to a system in which our money loses purchasing power over the years. For anyone aged 50 or younger, it’s pretty much all we’ve ever known.

But it doesn’t have to be this way. Indeed, our country did fine for centuries without systemic continual chronic inflation.

So why do we accept it today?

For the best viewing experience, watch the above video in hi-definition (HD) and in expanded screen mode


Coming next Friday: Chapter 12: How Much Is A Trillion?

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The full suite of chapters in this new Crash Course series can be found at www.peakprosperity.com/crashcourse

And for those who have yet to view it, be sure to watch the ‘Accelerated’ Crash Course — the under-1-hour condensation of the new 4.5-hour series. It’s a great vehicle for introducing new eyes to this material.

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  • jadan

    So let’s go back to the good old days, right Chris, when men were men and money was real? Don’t you ever get tired of the same old bullshit?

  • Eric Hollingsworth

    Actually, price inflation picked up after the creation of the Fed, and continued at this increased rate until the crash of ’29, which still didn’t bring prices back to 1913 levels. Immediately after that, inflation continued at the previous rate until the end of WWII, after which it spiked. All of this happened under the gold standard. A policy of inflation is a way to keep the debt treadmill going and enrich the money monopolists, whether money is backed by commodities or not.

  • Scott R.

    The answer is gold, silver, and Bitcoin. But only Bitcoin can be truly used as a payment mechanism in our modern, interconnected, global, digital age.