No Amount of Money Printing Will Spark Inflation

Larry Edelson

It’s amazing to me how many pundits out there still think that inflation is coming back. That money printing can solve the world’s massive debt problems.

Why can’t they see reality? Why can’t they see the facts?

Combined, the world’s major central banks have printed some $10 trillion of new money since 2008. Yet …

Fact #1: There’s no inflation in sight. According to the Organization for Economic Cooperation and Development (OECD), the annual rate of inflation in its 36 members is a meager 0.56 percent.

In the European Union, overall inflation is running at half the OECD rate at just 0.28 percent.

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But that disguises the problem. Why?

Because in many European countries, like Greece, Italy, Poland, Ireland and even Finland — there’s no inflation at all — and instead, there’s outright deflation, with Greece leading the pack of course, with prices now falling at a -2.14 percent annual rate.

Heck, even prices in Switzerland, known historically for price stability, are falling at a -1.03 percent annual rate.

Fact #2: There’s no wage inflation. To have consistent across the board inflation, one must also have wage inflation. Indeed, historically, some of the highest inflation rates are caused largely by wage inflation. Yet today, there is none.

According to the International Labor Organization, based on latest data wage inflation (globally but excluding China) is running at a mere 1.1 percent. Hardly the stuff that can stoke inflation.

Fact #3: There’s no commodity inflation. As I’ve been documenting for you all along, there’s no commodity inflation. We’re in the opposite: Commodity DEFLATIION. Just consider this chart of the Global Commodity ETF (CRBQ) — a basket of equity securities that mimic the performance of the world’s biggest, global commodity producers. Companies like Monsanto, ExxonMobil, Archer Daniels Midland, Chevron and more.

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Despite all the money printing, commodity prices — and the shares of companies that produce them — have been sliding for four years now.

Worse, the plunge is now accelerating!

Fact #4: The supposed leading indicator for inflation, gold, is in a bear market. If gold is such a great leading indicator of inflation, then why is it still in a bear market?

Why has it lost 40 percent of its value since its high in September 2011? Since all that money printing occurred?

It’s simple …

A. There is no inflation. And …

B. Gold is NOT the inflation hedge that you think it is!

Indeed, as I have said all along, gold’s best role is as a hedge against collapsing governments. That time is coming — in the not-too-distant future — and then gold will finally shine again. But that time is not yet here.

Fact #5: Despite all the money printing, the U.S. dollar is soaring. The Fed has printed roughly $4 trillion since 2008 and yet the dollar is 34.4 percent stronger than it was when the printing began!

If you’re like most investors, or you listened to most pundits, this one really has your head spinning. After all, almost everyone told you that when the Fed prints money, the dollar loses purchasing power and goes down in value in international markets. Right?

Wrong. The fact of the matter is this. The value of the U.S. dollar isn’t solely dependent upon how many dollars are circulating or how many new ones are being printed.

The dollar’s value also isn’t dependent upon interest rates, per se. Instead, the dollar’s value is more a reflection of …

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A. What’s happening in the rest of the world.

In a nutshell, if a major portion of the world, like Europe, is in worse shape than the U.S. — then the dollar will get a boost.

B. Capital flows. Part and parcel of the above, but also geo-political in nature.

When there’s rising troubles in other parts of the world — as we have been seeing ever since I warned you that the war cycles were turning up — that benefits the dollar. Period.

And …

C. Inflation and/or deflation. Inflation erodes the purchasing power of the dollar. But there is no widespread inflation in the U.S. There isn’t even wage inflation. So forces A and B above are bolstering the dollar, dramatically — and in spite of the money the Fed printed!

So what then, you ask, is the
driving force behind all this today?

It’s this: There’s simply too much debt in the world!

All told — counting both official and unofficial government debts (contingent IOUs that governments around the world don’t like to talk about) —

Global government debt reaches as high as $500 trillion …

While global gross domestic product (GDP) is merely $75 trillion.

That’s a debt-to-GDP ratio of more than 600 percent.

And that debt mountain, the biggest the world has ever seen, is starting to crumble.

Europe is ground zero for the collapse. Soon, it will leapfrog to other super-indebted Western governments, namely Japan and then the USA …

In a debt and deflation spiral that will knock your socks off and change everything you thought you knew about economics and markets.

Best wishes, stay safe and stay tuned …


Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

Comments 62

Manny July 15, 2015

(On Gold, Silver, and the miners) "We are so close to a bottom that I can literally taste the final lows, not to mention the huge profit opportunities that lie ahead." (July 2013)

Damien Long Island (ny) July 15, 2015

I can't help but go to bat for Larry. I've been invested in PM for well over 2 decades. I haven't purchased a single ounce since 2008. (Dec). I would have purchased when gold first hit 1500 on correction ( 2013). But have waited until now all thanks to Larry. I have saved money (33%) or more because he said convincingly, it has not been the right time to buy yet. Larry is The only person I have read other than Radomski to refrain from acquiring PM at this time.

ian July 18, 2015

can you Manny,give me a shout,cos I am not sure

Rick July 15, 2015

Good article, but it should be noted that there is a difference between the classic definition of inflation - the increase of the money supply - and the price inflation that you are referring to. Also, price increases nearly always lag the increase of the money supply; sometimes by a long period of time. Historically, the longer the lag, the greater the eventual price inflation. This is what may be going on now. Still, I enjoy your writings - keep up the good work.

Mephisto July 15, 2015

masiloka, man. masiloka.

Mark July 18, 2015

Studies have shown inflation is currently running at 11-12% (just look at how package sizes have shrunk at the grocery store). Cheap gas prices, an unstable Euro and China's follies have helped to postpone the eventual financial suicide of massive QE and money-printing. So, if inflation is currently over 10%, where will it be after the inevitable market correction? There will be a trigger event causing a new "2008"....a new "petrodollar", Iran nuking Israel, whatever....and most of the excess currency is still in bank vaults....what happens when it makes its way into the system? I find this writer's arguments very short-term...

BFD July 15, 2015

INTERESTING SEQUENCE OF RECEIPT OF THESE E-MAILS FROM WEISS! RECEIVED: 01/13/2015 at 4:45 AM (MST) Lies, Lies and More Lies (from Martin) by Martin D. Weiss, PhD. THEN . . . RECEIVED: 01/13/2015 at 9:56 AM (MST) (FROM) Mike Burnick Research Director Weiss Research P.S. If you don't know Larry Edelson, you should: He's famous for accurately predicting every major investment event since the 1987 stock market crash. And that includes the real estate busts and Great Recession of 2008-2009 and also every major move in the gold market since 1999. So whatever you do, DO NOT miss this newest warning! Martin is right: Lies, Lies and More Lies! BUT WAIT; THERE'S MORE . . . 7:14 AM (MST) A shocking prediction from Weiss Senior Analyst LARRY EDELSON: "It's all about to hit the fan." "It's going to be like A TRAIN RIDE THROUGH HELL." Martin is still right: Lies, Lies and More Lies! Nothing to do with the article per se; just the same old Weiss' BS to sell - sell -sell! Nothing wrong with selling value, but these guys have noting but BS to peddle.

mammy July 15, 2015

do you really have to take up so much space, BFD? were say more in one sentence than you do in half a page.

Nella July 15, 2015

If there's no inflation, then why have food prices doubled over the last 8 years, as well as my rent?

Ray July 18, 2015

I think Larry refers to commodity price traded in the e changes. You're right, food price, rent gas, water are all rising and there is a reason why - ever heard of government tax? Yeah, that's the real culprit. Retailers merely pass that cost to us.

Arthur July 15, 2015

Hi Larry Love your comments ,please advise what will happen to us assets when China currency is part of the new currency?

mammy July 15, 2015

were, would you please give us your thoughts on this post you made last month? are the highs for the year still in? mammy were Thursday, June 25, 2015 at 11:54 am Thanks for asking. I wanted to wait until mid July for confirmation but I’ll give you my thoughts now. We have most likely seen the high for the year in all markets. There is a chance that mid July might see some new highs – but only a slim chance. It’s down from here though – major slide by end Sep/mid Oct. But that isn’t the final low for commodities – that’s early 2016.

mammy July 15, 2015

BFD, would you care to comment on were's post last month? i know how you keep track of these predictions and point out their accuracy. mammy

were July 15, 2015

What's your point? What I said still looks accurate to me.

mammy July 15, 2015

thanks. i'm taking profits today on your advice.

Heidi July 17, 2015

To were -- stick with what you said June 25th - it looks like you will be so very close to it .

mammy July 17, 2015

looks like a damn good call by were. i'm heading for the sidelines. i can always get back in. good job, were. (you're too smart to be hanging out with BFD, though.)

Faith Inda Sistem July 15, 2015

No inflation. Right. Larry mocks every word that comes out of a "Gubmint Bu-row-Krat's" mouth but then he repeats the same lies. No inflation. Right. Larry (and the Gubmint) simply remove "the volatile food and energy sectors" and report the "core inflation." I do that every month in my own budgeting: I simply don't eat several days a week and sit inside bundled up in the cold since the heat is off. Works every damn time, Larry! Everything costs more but there is no inflation. I got it. Perfect logic. Let's draw a picture! Now, boys and girls: Pick up your crayons (any colour will do and you can use either end of the crayon). Now, draw a square circle! Great. Now, draw a round square. This is Larry's House of Mirrors Inflation Institute! But, Larry, your columns are good for comic relief. Your writing is kind of an economic version of "The Simpsons." Go ahead! Grab your credit card! Run To The Phone! Call Larry RIGHT NOW and get in on the Ground Floor of Larry's Miracle Prayer Tower and Economic Advice Center. [Ignore the Asian "women of easy virtue" surrounding Larry; they are his "aides."]

BFD July 15, 2015

Good dry humor - Larry deserves even more sarcasm . . . He should insert the word "I" in place of "they" when he says "they just don't get it". Larry is no fool; can't say the same for his "followers", though. Let's here more from "mammy", speaking of having nothing to say.

mammy July 15, 2015

the only one who seem to have any good advice is were. haven't heard a thing from you worth listening to, BFD.

JJM July 18, 2015

If you measure Inflation by the cost of things not needed - when times are tough people don't buy what they don't need and thus the cost for unnecessary items remains frozen or drops. 'I would like to have, but will wait till I earn more $$.' You can shop at the grocery store and not see the inflation except for 'paying the same price for less of an item', quite often 10% less quantity. Beware 'new and improved' can likely mean less for same price (new packaging and improved to keep price same) - make 240 cups coffee for same price as 270 used to be, make 21 cupcakes for same price as 24 used to be.

Craig Willison July 15, 2015

It's already here: Scroll down to charts. Elliott Wave has been predicting this for years. So has Martin Weiss in his book "The Ultimate Depression Survival Guide," chapter 1.

bob July 15, 2015

the bottom is so close i can taste it

bob July 15, 2015

didn't this guy post in 2010 that the dollar was doomed and about to collapse with gold and silver ready to surge i have never heard a guy change his mind so much how can anyone take him seriously???

Manny July 15, 2015

Grab your wallets. I just received this "shocking" message earlier today. If the past is any indication anybody who falls for this teaser will have to spend a several hundred dollars for advice that will only ensure substantial losses: "Come October 7, it's all going to start crumbling." "Greece is only the canary in the coal mine: This great "October shocker" is going to make the Great Depression PALE by comparison." "It will be a five-year-long roller-coaster ride through hell." "Those who get blindsided by this crisis will lose everything." "Those who make the right moves right now stand to make MILLIONS." — LARRY EDELSON Senior Analyst, Weiss Research

mammy July 16, 2015

BFD and Manny have the same writing style. Are you the same guy? BFD Wednesday, July 15, 2015 at 9:28 am INTERESTING SEQUENCE OF RECEIPT OF THESE E-MAILS FROM WEISS! RECEIVED: 01/13/2015 at 4:45 AM (MST) Lies, Lies and More Lies (from Martin) by Martin D. Weiss, PhD. THEN . . . RECEIVED: 01/13/2015 at 9:56 AM (MST) (FROM) Mike Burnick Research Director Weiss Research P.S. If you don’t know Larry Edelson, you should: He’s famous for accurately predicting every major investment event since the 1987 stock market crash. And that includes the real estate busts and Great Recession of 2008-2009 and also every major move in the gold market since 1999. So whatever you do, DO NOT miss this newest warning! Martin is right: Lies, Lies and More Lies! BUT WAIT; THERE’S MORE . . . 7:14 AM (MST) A shocking prediction from Weiss Senior Analyst LARRY EDELSON: “It’s all about to hit the fan.” “It’s going to be like A TRAIN RIDE THROUGH HELL.” Martin is still right: Lies, Lies and More Lies! Nothing to do with the article per se; just the same old Weiss’ BS to sell – sell -sell! Nothing wrong with selling value, but these guys have noting but BS to peddle.

skiff July 15, 2015

What about healthcare cost and college education, like there not inflationary.

Howard July 15, 2015

Hi Larry What do you call it when ordinary people on the ground see the value of their weekly shopping bill go up and up and up?

John A July 15, 2015

Some of the things that have gone up for me this past year. Car insurance Property tax Timeshare maintenance fees Home Insurance Healthcare Cable bill Auto insurance Sewer and garbage fees Qdoba mexican grill raised price of my favorite burrito My favorite organic yogurt up 15% Auto paint Just some things off the top of my head, there is much more I am frightened when "they" say inflation is finally here. Will I be able to live? Will I be homeless?

Puunjabi Kahkmeede July 16, 2015


Puunjabi Kahkmeede July 16, 2015

Greetings from the great and terrifying allah! Please come join us for a delicious meal of raw camel dongs and roasted goat testicles!

rob July 17, 2015

no veggie option??

Puunjabi Kahkmeede July 17, 2015

The other said it had to talk your in this world and roasted goat testicles or any other internet stash of this show me that there is nothing new!

Puunjabi Kahkmeede July 16, 2015

There's going to be many who are scorched in the giant bowl of boiling semen!

rob July 17, 2015

Larry,. UK now has inflation?

Puunjabi Kahkmeede July 17, 2015

Inflation of raw camel dongs and its counterparts in my posts above the great shocking to see if they didn't know you are not allowed to make

LarryB July 17, 2015

As of 7/17/15 Larry looks mighty good. His call on gold very good! sucks to be long gold. Give credit when it is warranted.

Mephisto July 17, 2015

Funny. Larry missed the March and June lows. He was so sure. He even had a chart with some bright red arrows. Yes, I give him all the credit he's due - absolutely nothing. He's lost the mojo he once had.

Puunjabi Kahkmeede July 17, 2015

The testicles of all living creatures that are not the ones who was very good for the most part of my replies to see it was sped up and down as a delicious meal of raw camel dongs and roasted goat testicles!

$1,000 gold July 17, 2015

i may soon have to change my moniker to "3 digit gold".

Puunjabi Kahkmeede July 18, 2015

Golden age of this show is extremely fact that they are not incredibly stupid but it will take a while since we have to do this is what they are not incredibly stupid but it will take him to the great and terrifying allah has been an hour or two of this show is a must be crazy!

$1,000 gold July 18, 2015

peace out, brother.

john July 18, 2015

The only credit Larry deserves is for being wrong these last few years. If you look back several years,Larry is right on, but his timing is off. No one can predict the market, and this includes Larry with his proprietary computer programs. The only thing Larry talks about lately are his war cycles. The only thing good about this site is the laughs.

Terri July 17, 2015

Generally speaking you might be right that inflation doesn’t exist in the traditional sense but that is because inflation doesn’t look the same these days. Ten years ago I didn’t need to have a smart phone in order to do my job but now I do therefore I pay $100 more per month. Twenty years ago I didn’t need to buy a computer but now that is an additional expense and if I don’t have access to a computer then I am at a disadvantage. Ten years ago cars cost less than they do now. That’s when they were made of steel but now they make cars out of fiberglass so my auto insurance doubled. The car I drove ten years ago didn’t lock the door for me or turn my lights off and on but now I must pay for this even though I’d rather lock the doors myself. And since it is almost impossible to live without a car and I drive for a living I need a replacement car every few years. In 2005 I paid $2.40 for a gallon of gas but over the last 10 years I have paid a lot more than that. The cost of medical care has gone thru the roof for most. Taxes are on the rise. And education like housing has gotten out of the reach of many people in the last 10 plus years that they might have been able to afford before the government created bubbles. One month ago I paid $6.00 for a pound of chicken today I paid $8.00 per pound for the exact product (33% increase?). I eat hamburgers at The Habit the price just went up 2 weeks ago by 10%. I haven’t received an increase in pay in the last 10 years. If I quit or lose my current job I will probably make less money at my new job. Wage deflation has the same effect as cost of living inflation. I’m more in debt now than I was 10 years ago so I pay more in interest. Ten years ago I made decent money but today that same paycheck isn’t enough. If you don’t call this inflation then what do you call it? Slavery? That is not so far from the truth if you consider the gap between employees and CEO’s is only getting wider.

john July 18, 2015

I have to respect a guy who has the balls to list all the negative comments. I just hope that that you are right this time. I think that you are.

terry shead July 18, 2015

Larry, quite agree with you money is debt the banks with all there fractional reserve banking are a scam. The only answer is hard assets gold silver and oil copper and I own shares in a pawnbroker, after the collapse they are going to be in demand.

Travis July 18, 2015

You have a lot of salient points about inflation, but have you been to the grocery store lately? Remember the old inflationary depression words? It's happening, and when no one wants gold, maybe it is time to buy, or at least stick your toe in. As far as the market, remember the tulip bulb thing in Holland? Hype the market, are now the key words brokers use to continue to feather their nests.

Ian Dainty July 18, 2015

I second Travis' point about going to the grocery store. I live in Toronto, Canada and meat alone has gone up double digits in a year, fruit and vegetables aren't far behind. All food has more than doubled in less than ten years. Housing prices in Toronto have tripled since 2000. So, you can say inflation is dead, but you certainly can't prove it here.

Mary F. July 18, 2015

Have you shopped at the grocery store lately? How about home owner"s insurance? It seems to me that staying alive costs more these days.

Rc July 18, 2015

950 dollar gold here we come. I didn't think it would ever happen. I have to say at this point, Larry was right all along.

$1,000 gold July 18, 2015

i've been on this site shorting gold with JDST and DUST the last couple years.

ian July 18, 2015

Never heard so much bitching Larry,Maybe the children cant read charts, no one can predict the future accurately,but my thought are when and if something hits the fan worldwide, keep your head and ass down,it might get blown off

Rick Szymanski July 19, 2015

A big thanks to you , Larry. I too have been certain of the defenition of inflation and the beginning of money printing in 2008 would result in inflation. Webster dictionary defines inflation as .....An abnormal increase in the supply of money and or credit resulting in a substantial and continuing increase in the general price level . Had this money increase been directed to the genarel population as was in Germany after WW 1 and present Zimbabwe , we too would have seen the same results. This money printing has gone towards government debt and financial institutions. Financial instutions are then lending this money to Wallstreet and big corporations. Corporations are using the cheep borrowing costs to buy back their own stocks in order to appease stock holders and drive up their stock valuations and governments using the near zero interest costs to fund their debt and deficits. Wallstreet uses this cheap cost money to speculate and lend to other nation economies.

Ray July 19, 2015

If we do not have inflation, why is everything so high at Wal-mart?

Lance July 19, 2015

"..Most investors now believe three things about the Federal Reserve, money and interest rates. They think that the Federal Reserve is artificially depressing rates below what would be a "normal" level. They believe that in the process of doing so the Federal Reserve has enormously increased the supply of money and they believe that the USA is on a fiat money system. All three of those beliefs are incorrect. One benchmark rate that he Federal Reserve has absolute control of is the rate paid on reserves deposited at the Federal Reserve. That rate is now 25 basis points, after being zero since the inception of the Federal Reserve in 1913 until recently. If the Federal Reserve had left that rate at zero t-bill rates would now be even lower than they are now. The shortest t-bills rates would now probably negative. Paying interest on reserves combined with the subsidy to the banks of providing free unlimited deposit insurance on non-interest bearing demand deposits is keeping t-bill rates positive. Absent those policies the rate on t-bills would be actually negative. The Chinese and others all over the world are willing to pay anything for the safety of depositing funds in the USA. Already, Bank of New York Mellon Corp. has imposed a 0.13% charge on large deposits. An investor who believes that interest rates are headed up may respond that the rate paid on reserves is a special case and that the vast increase in the money supply resulting from the quantitative easing must result in higher rates when the Federal Reserve reverses its course. The problem with that view is that the true effective money supply is still far below its 2007 level. Money is what can be used to buy things. Historically money has first been specie (gold and silver coins), then fiat money which is paper currency and checking accounts (M1) and more recently credit money. The credit money supply is what in aggregate can be bought on credit. Two hundred years ago your ability to take your friends out to dinner depended on whether or not you had enough coins (specie) in your pocket. One hundred years ago it depended on the quantity of currency in your pocket and possibly the balance in your checking account if the restaurant would take checks. Today it is mostly your credit card that allows you to spend. We no longer have a fiat money system. Today we have a credit money system. Just because there is still some fiat money does not negate the fact that we are on a credit money system. When we were on a basically fiat money system there was still a small amount of specie in circulation. Even today a five cent piece contains about 5 cents worth of metal, but no one would claim we are still on a specie money system. Fiat money is easy to measure; M1 was $1.376 trillion in 2007 and was $2.535 trillion in May 2013. The effective money supply is the sum of fiat money and credit money. Credit money cannot be precisely measured. However, When the person in California whose occupation was strawberry picker and who had made $14,000 in his best year was able to get a mortgage of $740,000 with no money down and private equity could buy a company like Clear Channel in a $20 billion leveraged buyout, also with essentially no money down, the credit money supply was clearly much higher than today. A reasonable ballpark estimate of the credit money supply is that it was $70 trillion in 2007 compared to $50 trillion today. The effective money supply is the sum of the traditional fiat money aggregates plus the credit money supply. Thus, despite the clams of Ron Paul and Rick Perry to the contrary, the effective or true money supply has fallen drastically over the last few years..."

were July 20, 2015

On Sunday, July 19, Armstrong stated that the gold crash has started. But if you look at his own chart that he includes, there is a high in August, which he ignores. Which is it, guy? I'll stick my neck out here. This is not the "crash" yet. There will still be an uptick by mid August according to my method. But it won't be a new high.

$1,000 gold July 20, 2015

where've you been? the gold bubble popped at the end of 2011 when the price peaked at over $1,800. these retracements are usually about 50% of the high water mark, which just happens to be the strong support/resistance level about about $900. one of the best shorting opportunities of our lifetime is about over, not about to begin.

Robert July 20, 2015

Thank you were. And when could this uptick begin?

were July 21, 2015

if you have not been playing the waves, you've been missing out on much, much moolah

$1,000 gold July 20, 2015

i've been shorting gold for the last couple years with JDST and DUST which larry has recommended more than once. today alone they're up well over 20%.

san juan July 20, 2015

barring a black swan gold will see 1000 900 even 750 because the banksters can shake out the weak hands and make trillions more than ever. china revealed it stacked less tons than thought. i.e. they want to stack more cheaper. the banksters can kick the can until forever minus the day they say they canr and pull the plug. its all rigged. dont fight the fed means dont try to pick tops and bottoms. the trend is your friend. the rothschild said i always sold too soon. keep it simple stupid. blood in the streets is not a nosebleed but a mortal wound that is survived. how? the hand is quicker than the eye. when in doubt stay out. the market ie the banksters can be wrong longer than you small traders can be right. live and learn. be well

Ringer July 22, 2015

I strongly agree that excessive government debt is deflationary. They know it too! That's why they drop rates and print money to try to counteract it. It's not the longer and scandalous story of how we got in this mess, but it's where we're at. I think that most regular people have a good sense of who the villains are, and when the ropes and guillotines are brought out, you can bet bankers, politicians, and corrupt medical industry leaders will be hiding their person and property. I agree that input prices for many important items has dropped, including two major items--stagnant and falling wages and falling oil price. However, health care costs, especially in the US, cost of housing (rent and own) have spiked back, and food prices have been locked in at previous high levels despite lower input costs. Don't you think that explains the huge surge in associated corporate profits and stock prices (ex. health care stocks)? My rent is 30% higher than it was 9 years ago for the same apartment, but due to recent pay cuts I earn only about 5% more. During the same period my health care costs have risen by 50% and cost of food about 30%. I'd estimate that over the past 9-10 years I've lost about half of my purchasing power and I have significantly less disposable income. So we have a situation where corporate profits can be through the roof while due to government mismanagement, most people (the 99%) are poorer in real terms than ever. So buy stocks! Especially ones of global corporations that benefit from growth in the developing world, even while the developed world stagnates.