The Ultimate Inflation and Financial Literacy Quiz Based on Peter Schiff's Insig...

Peter Schiff on Inflation, Fiat Currency, and Financial Literacy

Inflation is the biggest threat now than it has ever been, and it's a significant factor in determining savings and investment decisions.
Politicians care about their own political careers and re-election, and they promise voters something for nothing to buy their re-election.
Politicians cater to donors who provide a lot of money, and they sacrifice the national interest to do what's right for themselves.
Inflation is an expansion of the money supply, and deflation is a contraction of the money supply.
Governments create inflation, and it's a tax on the people.
Inflation is the value of money going down, not prices going up.
Rising prices are not necessary for prosperity, and politicians try to sell the lie that they are.
In the past, gold was keeping politicians in check, and it worked much better when we had honest money when we were on a gold standard.
Fiat currency is not backed by anything permanent, and politicians can create money by printing it.
Inflation poses the cardinal danger to long-term financial security and prosperity for people because it defers expenses into the future.
Financial literacy is crucial, and people need to understand inflation and its impact on savings and investment decisions.
The free market drives quality up and price down, while government drives quality down and price up.The Problem with Inflation: Explained
Inflation occurs when there is an expansion of the money supply, which causes the value of money to decrease and prices to go up.
Governments have run enormous deficits and inflated housing bubbles, leading to massive quantitative easing programs, which is essentially printing money and buying government bonds.
Central bankers have been telling us that inflation is too low for years, and now there is double-digit inflation or high single-digit inflation in most developed economies.
No government is willing to do what it takes to reduce inflation because accepting responsibility for creating it and reducing government spending or raising taxes on middle-class voters is politically unfeasible.
Politicians are under pressure to continue financing their spending through inflation, making the inflation tax bigger every year.
Inflation is the worst possible tax because it impacts the people who can afford it the least, such as the middle class, working poor, and retirees living off fixed incomes.
Inflation is particularly hard on non-entrepreneurial savers who have put away a certain store of value, and it devastates them.
The Consumer Price Index (CPI) is used to calculate inflation, which is the average cost of a standard basket of goods, but the basket changes, and the politicians decide what to put in and take out, leading to a rigged CPI.
Governments have changed the methodology for measuring price increases, and hedonics is used to subjectively decide if a product got better or worse, leading to inaccurate CPI calculations.
The CPI used to include housing prices and rents, but now it uses owner's equivalent rent, a fiction that is made up by asking people who don't own homes how much they think they could rent it for.
A proper CPI that includes the cost of shelter should be calculated based on those who want to buy rather than those who already own.
The government always underestimates the deflator, which adjusts the GDP for prices, to make the number lower and not report high inflation.Inflation, Debt, and the Illusion of Economic Growth
GDP can appear to be growing due to inflation rather than actual growth.
Politicians have incentives to create inflation and lie about its effects on the economy.
Inflation benefits debtors, particularly governments, which are the biggest debtors in the world.
The US government has $32 trillion of funded debt and over $100 trillion in unfunded liabilities.
Independent sources of inflation data are necessary as government statistics are biased.
The US is running over $2 trillion in deficits annually, which is being financed by inflation.
Technological progress can make things cheaper in the future, but inflation reduces the value of money.
Borrowing from the future is only justifiable if it creates something that will benefit future generations.
Social Security is an intergenerational Ponzi scheme, and the US government has spent all the money collected for it.
The US has managed to maintain the status of the world's reserve currency due to its financial and industrial might.
The dollar only appears clean because of its reserve currency status, which is in jeopardy.
America is the world's biggest debtor nation, owing more money than all other debtor nations combined.The Role of the US Dollar and the Potential for Gold and Cryptocurrency as Alternatives
The US dollar became the reserve currency due to America's production of consumer electronics and the dollar's convertibility to gold.
The dollar's reserve currency status is expensive for the rest of the world and allows Americans to live beyond their means.
The world is starting to move away from the dollar due to economic costs and political risks, but there is no clear alternative.
Gold is seen as an alternative to fiat currencies as it is a real asset with intrinsic value that central banks are increasingly buying.
Gold has unique properties that make it qualified to be money and has proved itself as a storehouse of value over centuries.
Gold satisfies the three primary conditions of money: unit of account, medium of exchange, and store of value.
Cryptocurrencies, like Bitcoin, have been compared to gold as a storehouse of value that is uncorruptable and easily distributable.
Bitcoin is obtained through mining and is distributed digitally, making it out of the hands of governments.
The cryptocurrency argument for being a storehouse of value is compelling, but it lacks the historical track record of gold.
Cryptocurrencies are not backed by a real asset like gold and are subject to market volatility and hacking risks.
The US dollar's reserve currency status is at risk due to its financial position and political risks, but gold and cryptocurrencies are not yet clear alternatives.
The world may increasingly turn to gold as a monetary anchor and reserve asset as central banks buy more and more of it.