The Rule of 72 and How it Applies to Inflation – December 2021

Inflation remains big news. Several of my past newsletters (Dec 2020, Jul 2021) identified this threat, even if the Federal Reserve Chairman, the Treasury Security, and Joe Biden (July 19 2021 White House briefing, just search for “inflation”) somehow couldn’t figure it out.

If you divide an inflation rate into 72, you get the number of years it will take to lose 50% of your purchasing power. So, if inflation averages 3% over time, you will lose half your purchasing power in 24 years.

Inflation this year is running at 6%, the highest in 30 years.

At this rate, you would need to double your income in 12 years in order to afford the same purchases you make today.

Medical inflation has run at 5-6% for many years, and medical costs already have more than doubled in the last 12 years. Is your paycheck keeping up?

Despite what it says, the Government loves inflation. Why?

Think about the $29 Trillion dollars of debt the taxpayers currently owe (because the Government really doesn’t owe anything, you do). And don’t forget the more than $200 Trillion in the Net Present Value of taxpayer debt when you consider all the money that must be spent in the future on Social Security, Medicare, Medicaid, government pensions and the like, for which we have no ability to pay. If in 12 years, a $3000 monthly Social Security or pension check is really only worth $1500, doesn’t that make the Government’s job a lot easier?

The Government doesn’t have to raise taxes to tax you.

All it has to do is print money.

Inflation is the tax.

The ruling class is aware of this. Shouldn't you be as well?

Arieff Consulting specializes in strategies that not only protect you against inflation, but allow you to use it to your advantage.