Why Inflation is Important in money management

Most people go about their daily lives without a basic understanding of the 'hidden tax' of inflation, which probably does more to eat away at their money than any other force.

Monetary policies of central banks around the world, especially the Federal Reserve in America, are able to operate under circumstances which allow them to get away with printing huge amounts of money which eventually leads to extraordinary inflation. This is why it's called the 'hidden tax,' as people aren't aware of it happening and why.

So when the recent bailouts using hundreds of billions of taxpayers' dollars was enacted, it's presented as a relatively harmless way to allegedly save companies who could have brought down civilization as we know it, without any proof of it other than it being asserted.

First of all, this isn't harmless, and we, our children and our grandchildren will be paying for this fiasco for decades to come; not only directly, but indirectly through outrageous inflation which will be directly related to the current practices of the Federal Reserve and its government allies.

People won't know why prices are going higher, but eventually the government will blame it on greedy capitalist or some other disingenuous idea which will will direct attention away from the monetary policy practiced by America.

But getting past the why of it, we also must understand how it will affect us on a daily basis. Inflation will obviously raise the prices of food and fuel, two of the major expenditures of consumers, putting pressure on their finances.
Other than that though, it will also affect out decisions related to investing, as we won't be able to make it if we invest in vehicles that not only keep up with inflation, but surpass it.

So when looking forward, we all must realize that prices of everyday items we must consume like food and fuel are going up right now, and will continue to go up in the future. Add to that the pressure of inflation as it relates to building wealth and investment, and we need to take inflation into account in making our decisions.

Those that don't will find their wealth diminishing and not understand why. Don't be one of them.