The middle class was created and destroyed by an economic formula thats been in place for a very long time: 1. Good Money - Every major empire starts out with good money, either gold or backed by gold. 2. Social Programs - As a country develops economically/socially, it takes on more public works, adding layer upon layer 3.Military Spending - As a nation’s affluence grows, so does it’s political influence and spends massively on the military 4. Wars - Nation puts military to use and expenditures explode and nations go to war 5. Fiat Currency - To fund the wars, the costliest endeavors, nations start to steal wealth of its citizens by replacing their money with fiat currency (value decreed by government and backed by nothing). 6. Inflation - Wealth transfer begins as hyperinflation sets in; Results in riots, eg. Egypt. Price of all commodities and goods goup. 7. Wealth Transfer- Final stage, in mass movement, nation moves out of the currency and into precious metals and other tangible assets. The currency collapses. This results in massive wealth transfer to those who positioned themselves in the right asset class in advance. The US is between stage 6 and 7. This move represents a massive transfer of wealth. This cycle is predictable. This is what happened to the Roman Empire and every other empire.
Posted on: Fri, 25 Apr 2014 17:44:28 +0000
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