Inflation is hiding in plain sight. And it’s already extracting our wealth.

Ryan McMaken –


"Where's the Inflation? It's in Stocks, Real Estate, and Higher Ed"

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– Flash Points –

1 – Price Changes are not Homogeneous
2 – No Deflation Here: Housing, Healthcare, Stocks, and Education
3 – Low Inflation Is Not "No" Inflation
         _{(The above 3 points are repeated verbatim from McMaken’s article.)}

– Synopsis –

In a recent article for Mises Institute, senior editor Ryan McMaken explains how inflation is already upon us, and that it’s hiding in plain sight.

Inflation – It Depends Where You Look

Whether or not we experience or even notice inflation may vary widely, depending on our socio-economic status, our age, or various other factors.

For instance, the price of oil has dropped over the past few years. Therefore, anyone whose business relies heavily on transportation would likely not see any inflation. Similarly, clothing prices have also been dropping, meaning that inflation might not be noticed by those operating in that sector. 

Inflation – Look Here 

On the other hand, anyone buying real estate or stocks, or anyone enrolled in higher education or needing healthcare, will probably realize that inflation is hitting them hard. Over the past decade, the cost of higher education has grown 30%. During the same period, housing prices are up about 50%, and the Dow Jones has risen over 100%. 

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Inflation – Look Closely 

Even though inflation may appear to be low or slow, it is in fact occurring, and it may be coming faster than we believe. In fact, at a supposedly “low”  level of 2% inflation, purchasing power will be cut in half over 20 years.

– Insight from Outside –

Inflation can proceed just as bankruptcy does – first slowly, then all of a sudden. And when it comes, it will take away much of our wealth. 

Inflation – Coming for Your Wealth

As we saw above, inflation results in a decrease in purchasing power. In a very real sense, that decrease is a form of “wealth extraction.”  If your annual budget for food is, say, $10,000, after 10 years of inflation, that $10,000 might buy you only 6 months’ worth of food. At the same time, the increase in stock and asset prices is an insidious form of “wealth transfer.”  It’s a tried-and-true method of taking from the poor and giving to the rich.

Furthermore, a knock-on effect is the increasing wealth gap – between the top 10% or so and those in the lower- and middle-income brackets.

Inflation is coming – for you.    _{(Image source)}

          Previous posts in this series – "Death of the Dollar, Posts 1–30"