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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: benwood who wrote (23819)	10/23/2009 1:24:30 PM
From: Wyätt Gwyön	1 Recommendation Read Replies (1) \| Respond to of 71407

you forgot that you get taxed on earning actually i did remember that part. i wrote: "so the nominal yield typically exceeds the rate of inflation... but not by enough to exceed the tax hit" that last part refers to the tax, and is also recognition that the tax will exceed the real return. i'm OK with that, though. over long periods of time, people who are rich should have to do something with their capital besides stuff it in the mattress if they want to preserve its real value. the same 20th century which saw the 95% or whatever decline in USD purchasing power saw a 6.9% geometrically compounding real return in equity markets. Another point is that, wherever you got your 3.7% inflation number, it likely was not Shadowstats.com we are talking about the entire 20th century here, before the shadow guy's business was around and before many of the current CPI games were invented. honestly i don't think you'll find a better reference than the book i mentioned for the 20th century. the stealth tax created through monetary inflation will, one way or another, erode your purchasing power. actually i don't think that's a given, at least in the near term. Japan has been very unsuccessful in implementing this stealth tax. to be honest, i hope they can create some inflation, because at least i can figure out things to invest in that will keep up with inflation. the scarier possibility is that they FAIL. if they fail, they will still need money, in which case they will just confiscate it directly. this will be in the form of an overt wealth tax, as opposed to the current covert stealth tax known as inflation. U of Wash tuition: 30% up in two years. the likely culprit there is a decline in their endowment and funding sources. ironically, it is a sign of asset deflation. you can bet it's not because they are paying their employees 30% more, or that average wages in Washington are up 30%. btw, this same thing is happening at many schools, and declines in endowments due to the stock cr*sh are cited as the primary cause.