Submitted by: Donald Hank
I see good things in this, but unfortunately, the 'savings' are eaten up and then some by the steadily rising medical costs, 9%/yr. As Dr. Tom suggests, it is an illusion.
Here is a description of hyperinflation (eventually you will want to look for these symptoms. We aren't that far away):
n 1956, Phillip Cagan wrote The Monetary Dynamics of Hyperinflation, generally regarded as the first serious study of hyperinflation and its effects. In it, he defined a hyperinflationary as starting in the month that the monthly inflation rate exceeds 50%, and it ending when the monthly inflation rate drops below 50% and stays that way for at least a year.[3] Economists usually follow Cagan’s description that hyperinflation occurs when the monthly inflation rate exceeds 50%.[4]
The International Accounting Standards Board does not establish an absolute rate at which hyperinflation is deemed to arise. Instead, it lists factors that indicate the existence of hyperinflation:[5]
- The general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power
- The general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency;
- Sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short;
- Interest rates, wages, and prices are linked to a price index; and
- The cumulative inflation rate over three years approaches, or exceeds, 100%.
Now we have already had a taste of this, in gas prices. Normally we do not apply the definition of inflation to single items, but if we did, gasoline would be found to have hyperinflated ('approaches or exceeds 100% in 3 years.' It did just that after our bungler in chief took over. And gasoline affects all other prices--wihch is why the Fed refuses to include gasoline and food in the infllation index. It is all a lie).
Don Hank
