Debt and (Inflation) Taxes - Podcast

January 25, 2024

Did you know inflation is on purpose? 

Government people would never admit this out loud, but inflation is a tax. They need inflation in order to maintain the borrow and spend system they've set up. 

In this episode of the Money Metals' Midweek Memo, host Mike Maharrey explains the inflation tax, how it is levied, and why. 

Maharrey kicks off the episode with a list of all the taxes we pay. He then makes the unsettling point that even with all of this taxation, governments are still deeply in debt. 

That means borrowing.

But as Mike explains, borrowed money has to be paid back. And that brings us back to taxation.

In order to sustain the borrow and spend system, the government needs more revenue. But there is only so much taxation that the citizenry will tolerate. Enter the inflation tax.

Maharrey explains how this tax is levied in conjunction with Federal Reserve monetary policy in an operation known as debt monetization. In effect, the central bank buys Treasuries (U.S. debt) with money created out of thin air. The result of all this money creation is rising prices due to the devaluation of the money. This is a hidden tax that benefits the government at your expense.

To show just how much the inflation tax has eaten away the average persons purchasing power, Maharrey reveals how much the purchasing power of the dollar has declined since Richard Nixon severed the dollar from the last connection to a gold standard. 

The podcast concludes with a call to action, advising listeners to preserve their wealth from currency devaluation with real money - gold and silver.

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Mike Maharrey is a journalist and market analyst for MoneyMetals.com with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.


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