Most of us are not millionaires. When we consider the enormous wealth some people possess, it can be tempting to wonder… why they can’t share a little? What harm could there be in leveling the field? A few hundred-thousand dollars, give or take, is nothing for some people, right? I could do with a new car, a new roof, or a Hawaiian vacation, we reason. Or, for that matter, what harm is there in printing some extra cash?
Sometimes it seems like the answer is so easy. As The Steve Miller Band put it, why can’t we just “House the people… Livin’ in the street… Oh, there’s a solution.” Many assume that those who stand against this sentiment must be rich and greedy, refusing to share their toys. It seems that the only thing keeping us from widespread financial equality and bounty are perfect examples of systemic greed and brute selfishness.
The truth is, the opposite is often true. Giving everyone a fair and equal share of the pie creates one primary result: the pie is no longer worth anything. If every American received one million dollars today, how much would a million dollars be worth tomorrow? Almost nothing.
Same Old Thing
These “solutions” have been attempted many times. A well-known photograph from the Weimar era in Germany, shows children playing in the streets with huge piles of real money. In an attempt to cope with pending poverty, Germany freely printed paper money during the first World War and found themselves experiencing hyperinflation. As a result, many lost everything.
Government-endorsed financial handouts ultimately punish regular people – those struggling to get by. Though often done in the name of the poor, instead of raising their financial outlook, they are the ones who pay. Inflation leads to economic recession, and those who were already suffering, into more desperate circumstances.
Yet the demand for financial fairness runs deeply in our DNA. The recent shutdowns caused many people to suffer financially or go out of business. As a result, the government started printing money like candy wrappers. Actually, it’s been even easier than that. All the Federal Reserve has to do these days is “use the computer to mark up the size of the account…” the numbers magically change. It apparently seemed like a good idea at the time.
Trillions of dollars chasing after the same or a smaller amount of the supply of goods has created a collapse in the value of stocks, bonds, real estate, and the dollar bill.
Worth is now a hallucinatory concept. Prices rise with no increase in earnings to compensate. “It isn’t just the ongoing pace of increase that is troublesome, but the pervasiveness of surging prices across various spending categories that has scarred household budgets,” says Chief Financial Analyst Greg McBride.
The result? Inflation is the highest it’s been in over 4 decades.
Portage Can Help!
At Portage Bank, we are wide awake to what is going on and shrewdly capable of navigating shifting financial grounds. If you are concerned about how to cope with inflation, we are here for you.
The last thing we want to do is pretend there’s no problem. Evasion only escalates consequences. Instead, let’s employ smart strategies to help you find sure value in a safe harbor.
You don’t have to understand all the economic nuances; that’s what we’re here for. You work hard to earn that paycheck and shouldn’t have to worry about it losing value. We are optimistic about the future, which means we can help you invest your savings and protect your earnings so that you can outwit, outlast, and stay ahead of whatever inflation brings.
Call us, and let’s talk about how we can help you get ahead and stay ahead!