What the government won’t tell you about inflation. (Your survival guide to a corrupt system.)

At 20 years old I kept asking myself questions like:

“Why does saving feel impossible.”
“Why is my money not buying as much as it used too?”
“What am I doing wrong, why does the system seem like its against me?”

Turns out, all of these were completely valid concerns.

I researched for over 100 hours, read ~30 books on the economy so I can prevent you from falling into the systems traps…

Disclaimer - I’m no expert and not a financial advisor, I’m simply doing these things, take it or leave it. :)

Let’s dive in.

Before we start…

What is money?

Money - is any item or medium of exchange that symbolises perceived value.

Essentially, our society trades value, to facilitate the transaction of unequal goods we need a value place holder. (An IOU for a future trade)

How is money created?

Banks create money - by creating loans (assets) and destroying bank liabilities, which occurs when loans are repaid.

The money in your savings account is their asset not yours. (I’ll explain why)

What is inflation?

Inflation - is a gradual loss of purchasing power, reflected in a broad rise in prices for goods and services over time.

This mainly occurs when banks create money which devalues existing money.

What is an asset and liability?

An asset - is a resource that is expected to provide a future benefit to its owner.

A liability - is something that a person or company owes, usually a sum of money.

The Current State Of US Debt

You may or may not know what the current US government debt is.
At the time of this newsletter it is a staggering 34.9 Trillion Dollars

The US government has only 20 Trillion to pay this back.

These 2 alarming figures illustrate the main problem created...

Governments operate like any other people or business.
If your income is lower than your expenses, you become insolvent/bankrupt.

The problem with countries debt in general is no one generation is responsible for paying it off because theres always lacking responsibility.

Its a constant game of “Kick the can down the road, not my problem.”

To give you an idea, all household debt in the US is sitting at 18 Trillion Dollars. Not even close to fixing the issue.

For reference:

- In 2022, The World Debt was 307 trillion USD.
- In 2024, The total Global Money Supply is $83 Trillion.

Politicians view: “Tax the rich, it’s all their fault.”

The economy works like a sieve, the reason people are poor is because they don’t understand how to preserve money or make lots of it. The rich do.

“Tax the rich, tax the billionaires, thats the solution, its those guys fault”

In some ways, I agree but when we do the math it is shockingly ineffective. (We need a systemic change, heres why.)

It is very hard to take power and control away from those who have it.

But, if we took all of the Forbes 400 and clawed back all of their wealth, something like 4 trillion dollars that would only run the US Government for 7 months

Okay, thats not enough…

What if we took 100% of their earnings every year, about a million peoples earnings, that would be around 500 billion and would run the government a shocking 34 days.

The problem with taxing those people is we take capital from those who are most effective at making those dollars more productive which props up the economy’s GDP.

The poor ignore the system and get taken advantage of.

The wealthy learnt the system to avoid getting trodden on.

The banks, governments and mega asset managers made the system, and pull the strings, they are who “win”.

I don’t like this reality either, but for us to fix the system we must address things how they are.

How the system really works…

Lets not sugar coat this for the sake of clarity…

Banks issue debt, debt is new money.

If the government/banks are allowed to create money by printing it which is essentially legalised counterfeiting… (They have the power to make more but you can’t)

The peoples money increases amount but looses buying power over time.

Can you imagine a job where you make “money”, but pay tax to be in the job.

Sounds fair enough so far right?

The cherry on top is that the same boss issues a bank account for the fake money you think is real (devalues over time due to money creation)

While they hold the real money (assets which increase in value due to scarcity)

Well, that’s essentially fiscal monetary policy and government for you…

Interest rate payments are the 3rd highest payment for the US government.

Every 100 days (July 2024) the US is printing 1 trillion dollars of debt.

If you bought $100 of groceries in 2020, you would get 25% more for that money than you do now.

Its like the government ate the inside of your birthday cake but didn’t disturb the outside.

It should be a human right to hold money that cannot be devalued by people or governments with ulterior motives.

For example (Based on current Inflationary levels in US):

We have 3 scenarios based on a 4 year time frame with returns compounded annually:

You hide your $2000 savings under the bed.

You stash your $2000 savings in a savings account.

You invest your $2000 savings in bitcoin.

Here are the results:

Your $2000 under the bed is still $2000, but the buying power is now $1500.

Your $2000 in a 5% interest savings account is now $2431, but the buying power is $1823…

Your $2000 in bitcoin (Based on total average return) is now $13,774 and your buying power is $10330.

Turns out, your investing decisions and the governments fiscal policy decisions now can be far more impactful than even your bosses decisions at work…

Why did bitcoin preform so much better than everything else?

It is extremely scarce (21 Million in the world ever), increases value as the dollar gets inflated and is on an exponential adoption curve.

Find a good quick summary of bitcoin here

What you can do now to protect yourself?

I get it, this was all very depressing for me to learn as well…

Unfortunately it is the state of the world, not just the US and we need to do something to change it or we risk being controlled fully.

Here are 6 things you should do to hedge against inflation:

1. Gain practical knowledge in valuable skills.

   If there is anything to be replaced with AI it will be repetitive knowledge that already exists - In order to differentiate yourself, we must be able to apply the specific knowledge in skills rather than only remembering them.

2. DO NOT SAVE MONEY

   If you save money, as we just demonstrated, your dollars are losing value. You do not need to be a professional to invest, however I recommend you read books to educate yourself before investing.

3. Become irreplaceable to society
   Leverage your uniqueness to your advantage. Double down on what you are good at and become known for it. This is the way to stand out in an increasingly technology driven society.

4. Build and maintain multiple income streams.

   Create a youtube channel, start an agency, invest in a small business, copywriting, social media marketing etc - Find things businesses need if possible.

5. Live frugally

   We don’t need designer clothes to be happy, cutting simple yet expensive things like this out can save tonnes of money (I know this from experience…)

6. Hold scarce, hard assets for the long term

   Gold and Bitcoin are my two favourites in an inflationary environment (I am not a financial advisor, this is not financial advice.)
   Real estate also works however I don’t like it as much because one persons asset is another persons liability. To me, its not as ethical.

“I don’t want to invest, it helps a system thats corrupt”

Fair point, I thought this a long time as well.

The old sentiment: “One mans assets is another mans liability”

Well, true mostly, your money is the banks asset, your house is the banks asset, your stock is the businesses asset and your bonds are the governments asset…

But theres a catch.

You can invest in gold, fine art, cars and bitcoin (Things that are inherently scarce which makes them valuable), and theres no person losing on the other side (unless you sell), you become a sovereign and ethical wealth preserver.

4 Ways Governments May Fix The Debt Crisis:

The government is in a world of pain, something will need to happen in the next few years to prevent banks going bust.

Here are 4 things they may do:

1. Austerity/Tax - Cut government budgets and increase taxes to “Save our way out of it” (Very difficult because Debt/Gdp is 124.7%)

2. Debt restructuring/Debt Jubilee - Pay back 50c on the dollar or 10c on the dollar etc… Last one to happen was in the year 2000. Find more about this here

3. Money printing - Make more debt to pay back existing debt (Most likely scenario, kick the can down the road, next generations problem…) Not Sustainable!

4. Productivity miracle - Debt/Gdp means we could either bring the debt down, or bring the production up, essentially grow out of it with free energy, AI and unlimited production (The mother of all miracles…)

   Like the internet, did in the 2000s, instead of driving to a meeting, we jump on zoom, instead of going to the store, we order online.

   This was the productivity miracle of the 2000s and it could happen again with AI and Crypto.

   
   The solution throughout history usually combines all these factors.

Personal Progress 7th July - 13th July 🤯

Weekly discovery:

Currently reading “10x is easier than 2x” - Dan Sullivan/Dr. Benjamin Hardy

We are going through this as a coaching group and has taught me many lessons so far, mainly the real world example of the 80/20 rule.

I was aware of this rule but seeing it applied as an example in a real estate business really taught me how much focusing on the important tasks and outsourcing the day to day tasks can grow us in business as well as personally.

Favourite quote of mine this week:

Current Reads:

The Way Of The Superior Man - David Deida

Brilliant book for masculine and feminine dynamics, relationships, purpose and generally a great guide I wish I read earlier on becoming a well rounded man.

⭐️⭐️⭐️⭐️⭐️

I can give you the tools, information, and resources to change, but at the end of the day, you are the only person who can change your life.

Reading this will do absolutely nothing unless you take ACTION.

Your dream life is around the corner. The only person stopping you is you.

My purpose in helping you is two fold:

1. Help you live with purpose to experience your ideal life.

2. Help you escape the system to unlock financial, location and time freedom.

I hope this edition helps you do just that.

To help another person unlock their potential - Share, Like and Comment.

Until next week,
Leigh.