More Than 1 In 5 American Children Are Now Living Below The Poverty Line

More Than 1 In 5 American Children Are Now Living Below The Poverty Line Economic Collapse

Perhaps the greatest victims of the economic nightmare that is unfolding right in front of our eyes are our children. The overall economic numbers are really bad, but when you examine the impact that this economy is having on children things get really horrifying. Today, 1 in 5 American children live in poverty and 1 in 4 American children are on food stamps. Experts tell us that about 50 percent of all U.S. children will be on food stamps at some point before they reach the age of 18. Up to half a million American children are homeless even as you read this. And yet we continue to insist that we are the wealthiest nation in the world. Well, if we are so wealthy, then why are so many millions of our children suffering so desperately?

Part of the reason is because an increasing number of parents can't find work. According to a U.S. Labor Department report, the average duration of unemployment in the United States hit 34.4 weeks in May, which was a big increase from 33 weeks during April. To give you some perspective how incredibly bad that is, the average duration of unemployment was only 16.5 weeks in December 2007.

The truth is that when U.S. workers lose their jobs they are finding it exceedingly difficult to find new ones.

In fact, 45.9% of those currently unemployed in America have been out of work longer than six months. That is the highest percentage since the Labor Department began keeping track of this statistic back in 1948.

So is there much hope that things will turn around soon?

No, not really.

In fact, Federal Reserve Chairman Ben Bernanke says that unemployment is likely to remain "high for a while".

That means a lot of children are going to continue to suffer.

According to one shocking new study, 21 percent of all children in the United States are living below the poverty line in 2010.

That means that more than 1 in 5 American children are now living in poverty.

That is a national disgrace.

Not only that, but the same report estimates that up to 500,000 children may currently be homeless in the United States.

Perhaps we should all think about that while we are enjoying our nice dinners tonight.

But most of us don't think that it is our job to do anything about it. Most of us have been trained that it is the job of the government to fix people's problems.

We have created a monolithic welfare state and record numbers of Americans are now dependent on it.

In fact, for the first time ever, more than 40 million Americans are on food stamps.

40.2 million Americans received food stamps in March, which was a whopping 21 percent increase from a year earlier.

But it is bad enough that 1 out of every 8 Americans is on food stamps. What is far more tragic is that one out of every four U.S. children is now on food stamps. In fact, as mentioned previously, experts tell us that half of all U.S. children will be on food stamps at some point before they turn 18.

So is anyone still not convinced that the U.S. economic system is broken?

So who is doing well these days?

The wealthy.

In 2009, the number of millionaires in the United States rose 16 percent to 7.8 million.

Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

The rich are getting richer as the poor are getting poorer. According to the United Nations, the United States has the highest level of income inequality of all of the highly industrialized nations.

The poor are left with an increasingly smaller slice of the pie to divide among themselves. In fact, those in the bottom 40 percent now collectively own less than 1 percent of the nation’s wealth.

But the truth is that as the U.S. economy continues to fall apart, we are all going to experience some very difficult times.

In particular, when the U.S. economy finally completely implodes, it is those who are almost entirely dependent on the "system" that will suffer the most pain. The vast majority of Americans live month to month, don't grow any of their own food and could only last a couple of weeks on the food that they currently have in their homes. So what will happen to those people when the system fails?

And in case you think that this kind of talk is fearmongering, perhaps you should start listening to what some of the top financial analysts around the world are saying.

For example, Anthony Fry, the senior managing director at Evercore Partners, recently told CNBC that things are getting so bad out there that he is "considering investing in barbed wire and guns".

Yes, things are really getting that bad.

Years ago the old timers would warn us that someday we would see Americans standing in bread lines.

Well, today food stamps are the new bread lines, and 40 million Americans a month find themselves dependent on the U.S. government for the food that they need to survive.

If that doesn't send a chill down your spine perhaps you should check your pulse.

When a government has to feed 40 million people a month that means that the system is badly broken.

How many tens of millions of people have to be on food stamps before we can all agree that we are in a complete and total economic nightmare?

If you know of family or friends that are hurting, please consider helping them out. The truth is that in the end we are all in this together. The government is not going to save us. The collapsing U.S. economy is not going to save us. But if we all roll up our sleeves and work together perhaps we can make it through the difficult years that are coming.

theeconomiccollapseblog.com

Financial Reform Bills Don't Do Enough To Prevent Another Financial Collapse, Says Grayson On 'Ratigan'

Huffington Post

Before the Senate passed it's version of the financial reform bill, Dylan Ratigan questioned whether the legislation addressed the causes of the financial crisis.

On "The Dylan Ratigan Show" Thursday, Ratigan recapped the causes of the global financial collapse, and then asked Reps. Alan Grayson (D-FL) and Brad Miller (D-NC) if the bills would prevent Americans from another collapse.

Grayson weighed in, saying that the legislation doesn't go far enough:

Grayson: Well the answer to your question is there's not enough in the legislation. What the legislation does is simply not enough. What it does is it extends the existing authority to resolve banks, to wind up banks to other financial-type institutions like AIG. And the reason why they claimed that there was a need for a bailout in the first place is because they claim that the bank resolution authority did not extend to insurance companies like AIG. I never really bought that argument. But they're saying that this legislation will permit that. I think the problem goes far deeper than that. I think we have to get away from this idea that we react to crises like this and we have to try to prevent them. We're facing a crisis in our economy as deep as the crisis existed in the 1890's when the trusts were taking over the economy. And to respond to that, we passed the Sherman Antitrust Act and said there couldn't be a trust. I think we need to do exactly the same thing in this circumstance. 'Too big to fail' means too big to exist. We have to systematically dismantle the institutions that cause systemic risk to the economy and that for sure the Senate bill does not do.

WATCH:

Why Won't You Die, Damn It!

Why Won't You Die, Damn It! David Galland

Back when I had more time, I would occasionally play Oblivion, a video game. A game so addictive, it's been known to contribute to flunking out of colleges and the failure of marriages.

When persevering in a sword fight, your computerized opponents were prone to angrily muttering the phrase "Why won't you die, damn it!"

That phrase pops to mind as I watch the global stock market continue to get hammered, as gold continues to battle the headwinds with impressive tenacity.

So why won't the damn crisis just die - and with it, gold?

It's not my intention to rehash the details of the events leading so many economies to this challenging place. Instead, I'll cut right to the chase by stating my firm opinion that the reason this crisis is so persistent - why it won't die anytime soon, and not without a lot of thrashing about - has to do with the debt at its core.

Earlier today, I was trying to explain the situation in terms appropriate to my son's 13-year-old mind. I put it something like this...

Imagine if you made $12,000 a year working as a counter clerk at the local pizza parlor. Then imagine you had foolishly run up $12,000 in credit card debt, the proceeds of which you had frittered away on consumables that contribute in no substantive way to creating future wealth.

Now, imagine someone was foolish enough to continue lending you money, so that you were able to spend approximately 40% over the amount you earned - or $16,800 in total, some percentage of which was the interest you were paying on your overhanging credit card debt.

Given that set-up, I asked, how could you possibly pay off your debt?

"Get a better job?" He responded.

A good answer, I thought.

But stepping out of the metaphor to the actual players in this drama, the indebted nation-states, how do they get the equivalent of a "better job?" Which is to say, raise revenue?

Only one way, really. And that is to raise taxes. But taxes can only be raised so far before they hit a wall beyond which people simply won't, or can't, pay them. And raising taxes by a sufficient amount to count, in the teeth of an epic downturn, will only further hobble the economy.

For the time being, thanks to all sorts of machinations, the U.S. Treasury is finding lenders willing to buy its debt and keep things afloat.

But now jump back to the pizza counter help and imagine what would happen to his or her finances if (a) the foolish lenders wised up and refused to keep trading good money in exchange for highly suspect IOUs backed by nothing... while simultaneously, (b) the credit card company bumped the interest rate on the debt outstanding from 3% to 10%?

In a nutshell, this is the current set-up of things. While the specifics will vary depending on whether it is the flag of Greece, Spain, Portugal, the UK, the U.S., Japan, etc., which flies over the home turf, the fundamental realities of this being a debt crisis are immutable.

And, as the EU is now learning, intractable. Which is to say, the only way that this crisis will die is if the debt can be reduced to a manageable level.

Given the sheer scale of the debt problem, all the easy ways for that reduction to occur have long ago packed up and left town.

At this point, any real solution will likely involve all of the following:

1) Bond investors being wiped out, or at least suffering serious losses. Tough luck, a non-bond investor might be tempted to think. But before you do, make sure you checked the prospectuses of your money market funds and the paper being held in great piles in the financial institutions where you currently park your money.

2) Inflation. Why pay back $1.00, when you can pay back 50 cents?

3) A wholesale canceling of contracts. Okay, so you thought you were going to collect Social Security in your declining years - think again. And that nice government pension? Oops.

4) Higher taxes across the board. Congress is getting ready to quadruple the federal tax on oil. And the imposition of a VAT in the U.S. is a near certainty, albeit with all manner of politically convenient but ineffective provisions to make it look like the Democrats aren't breaking their pledge to not raise taxes on the middle class.

5) Ultimately, defaults on sovereign paper. Like the indebted pizza jockey, once it begins to be hard to find lenders, and those that you can find are only willing to lend at much steeper rate, all that is left to you is to borrow enough gas to drive down to the nearest office of Dewey, Cheatem & Howe and start the process to declare bankruptcy.

In other words, this crisis is not going to go quietly to its dirt nap. Instead, the end will almost certainly be akin to a Viking funeral with the political equivalent of rape followed by a raging fire on a sinking ship. Riots in the street and a serious degradation in the quality of life of the majority of the citizenry are all but inevitable, followed by a sea change in the political landscape.

Then, and only then, can the world get back to the business of forgetting the lessons learned in order to repeat the cycle all over again.

As for gold, the fact that it has refused to die as the world's only reliable form of money over the last seven millennia should give you the confidence to include it in your portfolio at today's purportedly elevated levels.

Jeff Clark, the editor of Casey's Gold and Resource Report, has been saying it for years: Buy physical gold and silver. And if you want even greater gains, invest in solid, undervalued gold producers that can provide leverage of up to 4:1 to gold itself. Read more in our report, here.

www.caseyresearch.com

Hidden Gold Taxes:The Secret Weapon Of Bankrupt Governments

Hidden Gold Taxes:The Secret Weapon Of Bankrupt Governments Daniel R. Amerman, CFA

(Editor's Note: Mr. Amerman's eye opening explanation of the insidious nature of government taxation may be a bit disconcerting until we realize that gold and silver is money. So, rather than sell it, we will just spend it. - JSB)

Overview

What if there was a hidden tax that most gold and silver investors were simply unaware of? A tax where the government would take a big chunk of your starting net worth if gold went to $2,000 an ounce, leaving you poorer than you started with? A tax that rises with inflation, so that $100,000 an ounce gold could cripple your net worth?

This tax already exists, as we will demonstrate in step by step detail using three easy to follow examples. All but a few investors are unaware of this tax and its devastating implications. Simply put, when we assume that gold acts as “real money” and perfectly maintains its purchasing power during rapid inflation, then the higher that the rate of inflation rises, the higher the percentage of the average gold investor’s starting net worth that ends up belonging to the government.

Knowledge is power. Conversely, a time of severe monetary crisis could be the most dangerous time in our lifetimes to be uninformed. Investors who are unaware of this profoundly unfair tax, or who choose to ignore it, necessarily become helpless victims of the government. When investors become aware of perhaps the number one danger to long term precious metals investment, and adapt their strategies to deal with this danger – then they can unlock the true investment power of gold during times of currency crisis. And turn potential $10,000 or $100,000 an ounce gold prices into the once-in-several-generation wealth creation opportunities that they should be.

$2,000 An Ounce Gold

In the first step of our illustration, we will consider a situation and how it affects the life savings of two investors. The situation is that 50% of the value of the dollar gets destroyed by inflation. This is not a radical assumption, as with modern symbolic or fiat currencies the value of money is always destroyed by inflation. The only question is one of speed, and if we look at the United States, 80% of the value of the dollar was destroyed by inflation between 1972 and 2007 as measured by official government statistics. For this illustration we will assume there is a smaller loss in value of the dollar, but that it happens much faster – because the US is in much worse shape right now than it was in 1972 in some key ways.

Kate is well educated, keeps up with the newspapers, and is concerned that the global financial crisis may get worse. So she liquidates her riskier investments, and to play it “safe”, moves her money into a $100,000 money market account.

For our illustration we will assume Kate's money is safe – but the value of her money is not protected. Inflation destroys 50% of the value of the dollar. Kate still has her full $100,000, but it will now only buy what $50,000 used to. Kate has lost 50% of the value of her investments to inflation (for simplicity, we’re leaving out assumptions on interim money market interest payments).

Jack also reads the mainstream media, but reads more widely as well, and believes that high inflation is the logical outcome of the financial crisis. Jack therefore takes his $100,000 and buys 100 ounces of gold at $1,000 an ounce (using round numbers for ease of illustration).

We will assume that gold performs exactly like many investors hope it will. That is, it acts like “real” money and maintains its purchasing power in inflation-adjusted terms. Now, if the dollar is only worth half of what it used to be, and gold does maintain its purchasing power, there is only one way for gold to do so, and that is for gold to sell for twice the number of dollars per ounce than it did before.

Therefore, gold goes from $1,000 an ounce to $2,000 an ounce. Those dollars are only worth fifty cents (in today's terms), so we multiply $2,000 times 50%, and we end up with $1,000. Jack's 100 ounces of gold at $2,000 each will buy exactly same amount of real consumption, of real goods and services, as gold used to buy for him at $1,000 an ounce. Some would say that this is an example of a perfectly successful inflation hedge, where gold has performed exactly like it is supposed to.

The powerful advantages of having your money in an inflation hedge when entering a period of substantial inflation, can be seen in the graph below, which compares what happened with Jack and Kate.

Adding Taxes

Through placing her money in what is conventionally considered one of the safest possible investments, during a time of high inflation, Kate has lost 50% of her net worth. This is terrible, of course, but at least she should be able to get a nice tax deduction out of this $50,000 loss. Except that when it comes time to fill in her tax return, she starts with $100,000 in her money market fund, and ends with $100,000 in principal in her money market fund. As far as the government is concerned -- there is no loss to be deducted. Kate still has every dollar she started with.

Jack decides to lock in his gains by selling his gold investment, redeploy most of his newfound wealth into some new investments, and maybe take a little out to reward himself for having made such a brilliant investment. When it comes time for Jack to fill in his tax return, it shows that he bought his gold for $100,000 and he sold it for $200,000, thereby generating a $100,000 profit. Effectively, the government looks at Jack's having dodged the its destruction of the value of the nation's money, and says “Great move Jack, you made a lot of money! Now give us our share.”

Even in bullion form, gold is currently taxed as a “collectible” in the US, with a 28% capital gains tax rate, or almost twice the long-term capital gains tax rate on investments that the financial industry and government prefer. We’ll call it 30% to allow for some state capital gains taxes, and to keep the numbers round. However, this rate is not sufficient to cover government spending, as the federal government is currently running enormous deficits, as are the states and municipalities (particularly when we take into account not only declining tax collections but the pension fund crisis). So it is reasonable to expect potentially much higher taxes in the not-too-distant future, both in the US and other nations. For illustration purposes then, we will assume a 50% future combined capital gains tax rate on gold – which is not unrealistically high from a historical perspective.

So for Jack, as shown in the chart below, paying a 50% tax rate on $100,000 in profits means $50,000 in required tax payments, and subtracting those taxes leaves Jack with $150,000.

Our final step is to adjust for a dollar being worth 50 cents, so we multiply $150,000 by 50%, and we find that Jack's net worth after-inflation and after-tax has fallen to $75,000. When it comes to what matters, the purchasing power of what our money will buy for us, then Jack didn’t double his money, instead he lost a quarter of what he started with. Jack just met what are known as “inflation taxes”. And they ran him over.

Turning Gold Into Lead

From a gold investor’s perspective, $2,000 an ounce gold may seem like a dream come true. And when we look at the results, $100,000 turning into $200,000, gold does look like a great investment. Until we remember that the reason gold went to $2,000 an ounce was because of inflation and we adjust our investment results for inflation. We break even. While not a net improvement relative to today, this outcome is highly desirable compared to what happened to Kate. Gold did indeed act as “real money”.

Unfortunately, we then run into one of the most deeply unfair and little understood aspects of inflation and investing in anticipation of inflation. Government fiscal policy destroys the value of our dollars. Government tax policy does not recognize what government fiscal policy does, and is blind to inflation. This blindness means that attempts to keep up with inflation generate very real and whopping tax payments, on what is from an economic perspective, imaginary income.

These taxes turn gold from a shimmering dream to a lead weight around our neck, and mean even a successful inflation hedge can lead to a devastating loss in net worth in after-tax and after-inflation terms.

So how do we deal with this lead weight of inflation taxes around our neck, trying to pull us down under the water? Does all of this mean that we just need to swim harder, to try to overcome taxes?

$5,000 An Ounce Gold

What if gold goes much higher than $2,000 an ounce? What if the dollar falls in value to twenty cents, and we assume that gold again performs as a perfect inflation hedge, and keeps its value? If the dollar drops to 1/5 its value, then the only way gold can keep up is to rise to 5X the dollar price, which means $5,000 an ounce gold.

First let's take a quick look at Kate. She still has $100,000 in her money market account, each of those dollars are now worth twenty cents, and the real value of Kate's “safe” investment is now down to $20,000. Kate has taken an 80% hit to the purchasing power of her net worth.

Meanwhile, Jack has enjoyed some fantastic investment results from his investment acumen. With 100 ounces of gold at $5,000 an ounce, Jack is now half way to being a millionaire!

Jack is ecstatic, at least until he tries to spend some of that half million dollars, and finds out what it will buy for him after he has paid his taxes. Let's repeat our chart from above, but with gold at $5,000 an ounce. When it's time to file his tax return, Jack now has a $400,000 profit to report. Jack therefore has to write the government a check for $200,000 for taxes due, leaving him with $300,000.

When we adjust for a dollar being worth twenty cents, then Jack's real after-inflation and after-tax net worth, what he can buy in today's dollar terms after paying the government, is down to $60,000.

The difference between gold going to $5,000 an ounce, and gold going to $2,000 an ounce, is that Jack loses more of his real net worth. Jack loses 40% of the purchasing power of his net worth at $5,000 an ounce instead of 25%.

The lead weight of inflation taxes is still around Jack's neck, heavier than ever, trying to pull him and his net worth deeper and deeper underwater. Perhaps Jack just isn't working hard enough, and he is going to have to swim like a wild man if he's going to stay afloat, as he will not only have to outpace inflation, but also inflation taxes.

$100,000 An Ounce Gold

Let's explore what happens if there is hyperinflation and a dollar becomes worth a penny. For Kate, the situation becomes even bleaker as the $100,000 in her money market account will now only buy what $1,000 used to. Kate has lost 99% of her net worth to inflation. Instead of a comfortable nest egg for retirement, she is impoverished, as are the many millions of others who were not prepared for hyperinflation.

If gold (or silver) serves as “real money”, and maintains its purchasing power even as paper money collapses, then to offset a dollar becoming worth 1/100th of what it used to, gold must climb to a dollar value that is 100X greater than what it was. So gold must go to $100,000 an ounce in order to maintain the same purchasing power as $1,000 an ounce gold today. Once again, we're assuming that gold acts as a perfect inflation hedge.

Jack's 100 ounces of gold are now worth a cool $10 million! Jack decides to sell his gold, lock-in his profits, and then start enjoying his new status as one of the ultra-wealthy.

As illustrated below, Jack sells his gold for a whopping $9.9 million profit. The government looks at his profit, and demands its $4,950,000 share. This still leaves Jack a millionaire multiple times over, as he has $5,050,000 in after-tax proceeds. Until we adjust for that technicality of a dollar only being worth a penny. And we find that instead of entering the ranks of the ultra-wealthy, Jack's net worth on an after-tax and after-inflation basis has fallen by almost 50%, from $100,000 to $50,500.

Jack has made one of the most brilliant market timing moves of all time. But the end result is that he loses almost half of his starting net worth in purchasing power terms. What's going on?

The Better You Do, The Worse You Do

Something seems seriously, seriously wrong here. Jack bets his net worth that inflation will skyrocket, and he buys an inflation hedge in the form of gold. His prediction comes true, a high rate of inflation does occur, and his gold investment does perform as a perfect inflation hedge. Yet the ending bottom-line is that Jack loses a big chunk of the value of his starting net worth. And the better that the gold performs and the more spectacular his returns -- the bigger the chunk of his real net worth that Jack loses.

This relationship is summarized in the chart below. When Jack earns a 100% profit -- he loses 25% of his net worth. When Jack earns a 400% profit -- he loses 40% of his net worth. When Jack earns a 9900% profit -- he loses 50% of his net worth.

A Pervasive & Difficult Problem

Inflation taxes are a basic fact of life which investors pay every year when there is inflation. These taxes are entirely real and are deeply painful when we look at the world in terms of what really matters – which is not the dollar amount of our savings, but what our savings will buy for us.

Real as they are, however, inflation taxes are not a line item on our tax returns. There's no box that we check that says go to form “30236 IT” to calculate our inflation taxes. There is no check we write that’s specifically made out to inflation taxes. There's never any discussion in the newspapers or magazines about how much money the average investor pays every year in inflation taxes.

So if almost nobody sees inflation taxes or talks about them – do they exist at all? This may be a good time for a pop quiz of sorts. If you are skeptical, the examples of Jack and Kate were kept very simple for a reason. Go back through the basic illustrations, and try to disprove them. Now, you can change how the price of gold moves relative to the destruction of the dollar, and you can change the tax rate – but there’s no room for anything else.

Do you agree that the numbers work? This “quiz” is self-graded, but your “score” could be essential for your future. Because if our future is one of high inflation, then whether and how you deal with inflation taxes may be one of the biggest determinants of your personal standard of living for decades to come.

Inflation taxes are irrefutable. Whenever you look at investment results on an after-tax and after-inflation basis in an environment of inflation, then inflation taxes make their ugly appearance.

However, while our illustration of Jack and Kate was not all that complicated to follow, the numbers involved are just sophisticated enough where they are rarely acknowledged in conventional personal finance. That combination of just a slight bit of sophistication, with never explicitly appearing on a tax return, means that likely in excess of 99% of the general population is blissfully unaware of inflation taxes.

Let me suggest that a big whopping tax that 99% of voters are blind to represents major opportunity for the government. An opportunity that has been fully taken advantage of by governments, even if the average senator, representative or member of parliament has no better understanding than the general public. Indeed, as I cover in my Turning Inflation Into Wealth mini-course, when we take inflation taxes into account, then the real tax rate on investments in the US has historically been about 256% higher than the statutory rates.

History is bad enough, but as we illustrated with Jack and Kate, the higher the rate of inflation – the worse inflation taxes get. Staying ahead of inflation is hard enough. But even trying to tread water, to stay even with inflation, becomes extremely difficult when you have the lead weight of inflation taxes around your neck, pulling you down. The higher the rate of inflation, the heavier the weight of inflation taxes and the more difficult they are to overcome.

This is true for such traditional inflation hedges as gold and silver. It's also true for real estate. As it is true for stocks. Indeed, almost any traditional inflation hedge has difficulty in reaching the break-even point on an after-inflation and after-tax basis when we take into account the pervasive problem of hidden inflation taxes.

Reversing Inflation Taxes & Creating Wealth

There are two very sad aspects to what we covered in this article. Unlike most of their peers, millions of responsible, knowledgeable people are seeing through the soothing, complacent illusions created by the government and Wall Street. They understand the grave threat to the value of their money and their investments. They are moving to the real tangible protection of gold and other precious metals. Unfortunately, in the process, they are setting themselves up for victim status as illustrated in this article.

Yes, the “Jacks” of the world are likely to do far, far better than the “Kates”, but despite the dizzying numbers involved with how high gold can go with a truly high rate of inflation -- when we look to what our investments will buy for us after we've paid our taxes, our status is still that of a victim.

The other sad aspect is that this simply doesn't have to be. There are two things that gold does spectacularly well during times of financial and monetary crisis. Using these properties of gold, with a monetary crisis of historic proportions, a gold investor can come to the crisis not just with their net worth intact but possibly even having built wealth on a multigenerational scale.

But let me suggest that achieving this result on an uninformed basis, without fully understanding the issues discussed in today's article, will be a matter of rather unlikely good fortune.

There is a better path. Study. Learn. Invest in your intellectual capital. As covered in my “Gold Out Of The Box” materials, let gold do what gold does best. Let gold provide safety and security for you. Unleash the wealth creating abilities of gold during peak inflation to multiply your real wealth. But don't rely on gold as an inflation hedge and don't ignore inflation taxes.

To have a chance of beating inflation taxes, we not only have to realize they exist, but we need to thoroughly understand our opponent. Our opponent is an enormously powerful government that is deliberately blind to the effects of inflation. Government fiscal policy destroys the value of our money. Government tax policy is officially blind to inflation. So a crushing hidden tax is created that keeps us from maintaining the purchasing power of our savings, with our attempts to survive the deadly effects of inflation merely acting to increase government tax revenues.

The key to prospering in a world of inflation taxes is to understand that regardless of its strength, a blind opponent is ultimately a weak opponent. Through careful study and by focusing very closely on the intersection between taxes, net worth and inflation, we can discover how to turn inflation into gains in real wealth, to which the government is entirely blind. We can learn to reverse inflation taxes, so that instead of paying real taxes on imaginary gains, we are paying imaginary taxes on real gains. Entirely legally, with every cent of taxes due paid in full – because remember, inflation taxes don’t appear on your tax return, and neither does their reversal.

Copyright © 2010 Daniel R. Amerman, CFA

"Do you know how to Turn Inflation Into Wealth? To position yourself so that inflation will redistribute real wealth to you, and the higher the rate of inflation ? the more your after-inflation net worth grows? Do you know how to achieve these gains on a long-term and tax-advantaged basis? Do you know how to potentially triple your after-tax and after-inflation returns through Reversing The Inflation Tax? So that instead of paying real taxes on illusionary income, you are paying illusionary taxes on real increases in net worth? These are among the many topics covered in the free "Turning Inflation Into Wealth" Mini-Course. Starting simple, this course delivers a series of 10-15 minute readings, with each reading building on the knowledge and information contained in previous readings. More information on the course is available at Danielamerman.com"

Daniel R. Amerman is a futurist and financial consultant with a unique approach to helping individuals and organizations prepare for and profit from an upcoming time of generational change and likely financial turmoil. He is a Chartered Financial Analyst and former investment banker, with MBA and BSBA degrees in finance and over 20 years of financial experience.

Daniel R. Amerman, CFA | Duluth, MN USA | Email

danielamerman.com