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Friday, August 10, 2018

U.S. 12mo Wage Growth Wiped Out By 2.9% Inflation, BTC Is Up 258% Over The Same Period

The U.S. Dollar continues its inexorable slide into oblivion.

U.S. Labor Department statistics reported Friday (h/t: Memeorandum) reveal that the paltry increase in American workers' paychecks over the last twelve months has been wiped out and then some by U.S. dollar inflation:

In America, wage growth is getting wiped out entirely by inflation

"U.S. workers' paychecks are worth less than they were a year ago, the Labor Department reported Friday, as modest wage gains have failed to keep pace with inflation.

Inflation rose 2.9 percent from July 2017 to July 2018, the department reported, while average hourly pay increased 2.7 percent over the same period.

The lack of real wage gains comes despite a strong economy, with sustained growth and an unemployment rate of 3.9 percent — one of the lowest levels in decades."

Despite a strong economy?

Textbook macroeconomics would say the lack of real wage gains is a direct result of a "strong economy" with "sustained growth" artificially stimulated by a decade of Federal Reserve central planning of the credit market forcefully keeping the world economy in an artificially enforced, highly experimental, and dangerously radical low interest rate environment since 2009.

All that GDP growth comes at the expense of devaluing the purchasing power of the U.S. dollar, but before the currency is debased by the artificially low interest rates and free flowing credit, that newly created money is spent by the institutions highest up in the lending chain, and major corporations with massive lines of credit from the institutional financiers at the top.

This is how Wall Street captures the value of that money, created out of thin air by central bankers, before it circulates and devalues the dollars workers spend to pay their bills. It's a massive funnel of value from the bottom to the top.

This could hardly be described as free market capitalism. It's wealth redistribution from the working class to the banking class, sanctioned and supported by the United States federal government, and it's been stealing from Americans for the last hundred years, as the graph at the top of this article shows.

2.9 percent inflation sounds modest. No big deal, it's just 2.9 percent inflation right? That's a paper cut right? Wrong.

What it means is over your lifetime more than half of what you make is stolen from you by the banking system that constitutes the U.S. dollar. But you don't have to go full Bernie Sanders socialist to do something about it. (In fact that would definitely make it all evaporate much faster guaranteed.)

The answer is to keep your savings in deflationary commodities like gold and silver, and deflationary currencies like Bitcoin.

Despite much ado about the cryptomarket crashing and burning after this last correction cycle following the speculative bubble that burst last December, over the same time period that the USD ate your wage increases, Bitcoin appreciated against the dollar from $2,460 in July 2017 to $6,347 in July 2018 (h/t: CoinDesk).