eople have to accept that inflation has made them poorer.

At least that’s what an economist for the Bank of England recently said. Central bankers and politicians in America won’t articulate this, but it’s true nevertheless.

Inflation has robbed Americans of their earnings and savings, but that wealth didn’t just disappear. No, it was transferred to the government.

Over the last three years, many governments worldwide, especially here in the United States, ran unprecedentedly large deficits. Borrowing by the Treasury exploded by 147%, and the government’s voracious appetite for money far exceeded the savings available for it to borrow. In response, the Federal Reserve stepped into the breach and created the money out of nothing for the government to spend.

At first, everything seemed fine, if not great. People were literally paid to stay home and not work, like getting something for nothing. Consumers were flush with cash. Savings ballooned.