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In the history of civilization in regards to trade, there have been essentially two kinds of currency. One is based on commodities that have inherent value, such as food, oil, land, and clothing. The second isn’t based on any real value, but the perception of value, often called fiat money. In other words, its value is entirely based on what we as a society say it is worth. This would include government currencies (such as the dollar, euro, or yen), digital currencies (such as bitcoin), and precious metals (such as gold and silver). Recessions, depressions, and sometimes entire economic collapses are often rooted in governments’ manipulations of their currency. Two examples are Chavez’s Venezuela and Germany’s 1920s hyperinflation. Governments devalue their currency to cover out-of-control debt & mismanagement.

This is precisely what is happening in the U.S. right now. The FED is using all its tools to expand the money supply, while the treasury is spending trillions in extra deficit spending. Nothing real is coming from these actions. They’re simply changing the perception of value. Let’s look at an example. Most people have received $1200 stimulus checks are a set to receive $600 more. You may ask, why can’t they give everyone, say $5000…or even $1 million each? Wouldn’t that solve all our problems? Without even considering the future taxes needed to cover the cost, if everyone is now a millionaire, prices are going to go up on nearly everything. Apple can charge $20,000 per iPhone since everyone can now afford to pay it. A house previously selling for $250,000 may now sell for $2,000,000. Rent, food, cars, travel, and everything else would go up in price because in terms of economics, the entire demand curve has shifted. So that million dollars in terms of purchasing power doesn’t make you any richer. The only way to avoid this inflationary effect is to eventually raise taxes and decrease the money supply.

Despicable politicians of both major parties know all this, but they’ve decided to take advantage of the economic illiteracy of Americans. Their only concerns are staying in office and expanding their power, which is accomplished by the perception they’re “helping” us, not to mention the nominal increase in stock market prices. Future leaders will be left with cleaning up the mess, while current politicians will all be long gone. Whatever “stimulus” checks you get in the future, be sure to save them to pay the higher taxes & prices coming down the line.