Most Americans Live Paycheck To Paycheck
It may sound like a basic concept to bring in more money than you spend than you have going out, but the reality is that 63% of Americans live paycheck to paycheck. Add on top of the problem of living paycheck to paycheck; wages have not kept up with inflation. Finally, society pushes consumerism and that it is acceptable to live beyond your means. These three issues are a recipe for a personal finance disaster.
There is nothing wrong with a minimalist lifestyle. You don’t need to keep up with your friends or the Kardashians.
The Biggest Problem
While the three issues mentioned above are problems, the cause of the problem is the Federal Reserve, which is responsible for devaluing the currency and creating inflation. The consumer has less purchasing power as the currency is worth less each year, and inflation decreases a consumer’s purchasing power. This makes it more difficult to save because the majority of income goes toward necessities due to inflation. The Federal Reserve is responsible for devaluing the currency and creating inflation, making you poorer.
“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can only be produced only by a more rapid increase in the quantity of money than in output.” - Milton Friedman
The prices of even basic things become expensive. The United States is an overpriced, glorified, banana republic. It costs a couple of grand to survive buying necessities today. The dollar has already lost over 96% of its value since 1913. Buy Bitcoin Worldwide writes about key US dollar devaluation statistics:
The dollar has lost over 96% of its value.
$1 in 1800 is equivalent in purchasing power to around $22.13 today
Today’s dollar would be worth less than 4 cents back in 1913.
1913 is when the Federal Reserve took over the US banking system.
The Federal Reserve is the core problem since it controls the money supply and is responsible for the financial economy. It is a centralized system. The value of your currency and how to resolve inflation, which it creates, is decided by the few powerful people in charge of The Federal Reserve.
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