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The Most Important Financial Question You Must Ask June 19, 2009

Posted by Jeff Nabers in : Money , add a comment

inflsmdl

What is inflation?

I believe this is the most important financial question a person can ask. I am constantly on a trek to better understand money and wealth. Here is some of what I’ve learned thus far:

Per its original meaning:

I have a 1920 Webster’s dictionary that says inflation is a rise in the money supply. I have a 2006 Webster’s dictionary that says inflation is a rise in consumer prices. From this point forward, I will use “inflation” for its original definition (an increase in the money supply) and I will use “price inflation” to refer to a general increase in  prices.

How did this “Newspeak” happen?

Inflation is harmful because it leads to a rise in prices. When everyone’s expenses are rising faster than their incomes as a result of the actions of the government and banking system, it is like a tax on the American people.

With the harm being a rise in prices, the focus on the topic of “inflation” shifted from the cause (inflation) to the effect (rising prices). And so, over a period of decades, everyone (news media included) shifted into speaking about inflation as a rise in prices.

Why don’t inflation and price increases correlate directly anymore?

You can take simple economic examples and draw a direct correlation from increasing the money supply to a rise in prices not complemented by a rise in incomes. These are usually fictional stories of a group of people being stranded on an island and creating their own economy. They will illustrate with great clarity that increasing the money supply takes from the regular person and gives to the banker or his friends (such as the government).

Now apply those concepts to our current economy and you will be so confused, it will be easy to surrender to saying, “Gosh this stuff is for super-geeks to figure out and I’ll just go with whatever is reported to me.” Of course, we’ve learned that following the crowd and getting your information from normal reporting sources is a sure way to (more…)

Is the Departure from 401(k) Perks a Bad Thing? June 17, 2009

Posted by reformedinvestor in : Money , add a comment

You can’t pick up a newspaper today without hearing bad 401(k) news:

With the glory days of the conventional 401(k) coming to an end, it’s no wonder that many investors have ditched or are considering ditching the 401(k) altogether.

But I ask, is the end of the 401(k) – as we know it – a bad thing?

I’m sure people like Suze Orman would (more…)

Could We End The Fed? June 14, 2009

Posted by Jeff Nabers in : Money , add a comment

endthefed

The U.S. House is going to debate the “Audit The Fed” bill. I don’t pay close attention to what’s being debated and passed on the floor of the Senate of House of Representatives because what’s usually written up, sponsored, and voted on isn’t even read by our Congressmen.

This Audit the Fed bill is a different story. It’s sponsored by a Congressman who some call (more…)

Are We Putting All Our Eggs in One Basket? June 10, 2009

Posted by reformedinvestor in : Uncategorized , add a comment
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The Wall Street Journal reported on a study that $14 trillion dollars were being held in retirement assets in 2008.  Sixty-five percent of that total was in employer-sponsored defined contribution plans and about 25% of those assets were held in IRAs. Now don’t you think that is a lot of dough entrusted into an institution that has royally failed us?

(more…)

Why Does Government Fail? June 3, 2009

Posted by Jeff Nabers in : Money, Self Directed IRA Solo 401k , add a comment

While everyone argues about what the government should be doing, 2 very fundamental factors are ignored.

In this video I discuss those factors. One thing I didn’t include (more…)

Am I "The Greater Fool"? June 2, 2009

Posted by reformedinvestor in : Money, Self Directed IRA Solo 401k, real estate , add a comment
joker card

After reading an advance copy of Jeff Nabers’ new book, I learned more about the concept of “The Greater Fool.”  This theory says that people buy things thinking that it will go up in price and value and that a “greater fool” will come along and buy the thing for more.
(more…)