I’ve read last night this great quote: “…On a longer-term basis, central banks and policy makers are really trying to take money from someone, or some class of asset holders, and give it to someone else. The asset-class holder under attack is the saver. This is the framework that has been created by policy makers trying to re-balance the imbalances of the past 20 to 30 years. To put it bluntly, they are robbing savers and taking money surreptitiously from longer-term asset holders whose assets don’t anticipate future inflation.”
Yes, as hard and harsh as it sounds, this is the current world we live in.
Monetary inflation robs savers. It’s a hidden tax.
When the rate of inflation is higher than the rate being earned on short-term deposits, the deposit holder is losing money on a “real” basis (= inflation). Most insidious of all, monetary inflation is a tax that takes its largest toll on those who can least afford it — the poor and elderly.
These are the people who tend to have a larger percentage of their assets tied up in cash and short-term deposits, which are steadily being eroded in value.
One way to ‘fight’ this is to have a balanced portfolio that gives you assets that will resist the inflation. However, it’s a skill that the ‘normal’ saver is not harness with. I do hope the in the future we will see different Banks (many be something like: Simple Bank ?) that will give the savers some kind of peace with more balance products that will ‘save’ them from inflation.