personnel, including how to spell my name on the form properly, be authentic and writecustom.com is fully devoted to help you be authentic and writecustom.com is fully devoted to help you Essay Writing be authentic and writecustom.com is fully devoted to help you
Adobe Dreamweaver CS6
CorelDRAW Graphics Suite X5
Web store The Adobe Photoshop CS6 Book for Digital Photographers
Where to buy Lynda.com - Transforming a Photo into a Painting with Photoshop CS6
Purchase online Autodesk AutoCAD LT 2014
Ghostwirter
Essay quellenangabe
Essay schreiben englisch
Location tracker apps for android
Open gps tracker server
Google call tracker
Gps image tracker sony software
Android call blocker free app
Sports tracker windows phone 8 update
Best mobile tracker for android
Mobile spy smartphone monitoring software 7 day trial
Spy vs spy app for android
Spy matrix phone
Remove android tracker
Mobile theft tracker android
Cell phone tracker us cellular
Spy phone generator for symbian os9 phones
I spy toys android
<a href="http://adobebuy.us/product/adobe-acrobat-xi-pro/">web store Adobe Acrobat XI Pro </a>
<a href="http://adobebuy.us/product/adobe-dreamweaver-cc-2015/">with discount Adobe Dreamweaver CC </a>

Inflation Tax

| June 2, 2012

What is inflation

Inflation is the rise (only) in the general level of prices of goods and services in the economy over a given period of time. When price levels rise it will cost more to acquire the same amount of goods, or the same quality of service. Inflation leads to a reduction of purchasing power of your money such that the same £50 note would buy less food items in an inflationary environment.
The opposite of inflation is deflation – where we see the costs of goods getting cheaper as time passes.

Inflation Tax

Inflation can have positive and negative effects on the economy. However, the negative factors occur when the rate of inflation is report as being considerably lower than what the economy is really experiencing. This is occurring today in the world where governments have borrowed too much money and need to accumulate funds in order to maintain payments for social programmes such as the state pension, public sector pension, NHS.
The government here in the UK, and around the world have taken a two pronged approach – reducing interest rates to zero and under-reporting the rate of inflation.
Assuming the rate of inflation is reported to be 3%. The banks are offering 1% at best in standard savings accounts. This means that although you invest for a gain of 1%, you are losing 2% annually due to the general rise in cost of goods and services. However, imagine that the real rate of inflation is 8%, but reported as 3% (as we see with fuel prices, certain food items etc). So rather than savers receiving interest aligned with the cost of living they are out by 7%. The money that should have been paid out in interest is the balance saved by the entity you are saving with. This acts as an invisible tax on the saver, taking money that should have been earned. This strategy is mainly affecting those in retirement and those nearing retirement as they tend to have the life savings tied up in fixed income investments – mainly bonds and as I write today the bond rates are extremely low.

Financial repression

The correct term for this means of taxation via careful manipulation of interest rate and efforts to control the entire financial system is known as Financial Repression and it has been use successfully in the past by governments to pay there way out of debt following the World War II.

Financial Repression Article (from Finance and Development Magazine)

Category: Pension Education

About the Author ()

Andrew, founder of the Final Salary website (FS), started the website soon after the government announced drastic changes to pension schemes in 2010 and the need for individuals to take more control of their financial future. As an avid reader of all things finance related, he decided to share his knowledge via this informative website. Andrew brings knowledge across many areas of business, retail and consumer finance.

Comments are closed.

845cf0c99e
/wp-admin/options-general.php?page=emc2-popup-disclaimer/emc2pdc-admin.php
865adbdead
5
0
I Accept
I Decline
1

The securities and investments discussed within this website is for information purposes only.

Final Salary aims to help you make the most of your long term savings investments. Although we offer information and suggestions on how to do this, the power to act on this information and the responsibility of doing so lies with you. This disclaimer protects you as much as it does ourselves.

All information contained within this web site is obtained from sources believed to be accurate and reliable. While all information presented is believed to be accurate and reliable, it is prepared “without audit” unless otherwise identified as audited financial information. Due to the possibility of human or mechanical error as well as other factors, this information is provided “as is” without warranty of any kind and Final Salary Limited makes no representation, express or implied, as to the accuracy, reliability, completeness, or timeliness of this information, and is not responsible for any loss or damages incurred by parties using this information.

FinalSalary will not be liable for any loss or damage caused by a reader’s reliance on information obtained from our website, or from anywhere linked to from our website. We strongly caution you not to rely on the information you find here to inform your decisions – rather, use it as a starting point for doing your own independent research. Then you must decide for yourself the accuracy and merits of the information that has been shared.

Final Salary Limited are an “information only” financial service provider.

I Accept I Decline