Here’s something to ponder… Technology has continued to drive down prices

Here’s something to ponder…

Technology has continued to drive down prices of nearly everything.

For example, the cost to travel coast to coast is a fraction of what it was 100 years ago.

Or more strikingly, cell phone providers basically give away the 2-year-old iPhone with a basic plan.

The term for this concept is called deflation. And technology and capitalism (through competition) continually cause prices to fall.

But what do you hear about more?

Inflation. We are told prices always go up, that the value of the dollar is worth less today than it was yesterday. And in general, it’s basically a tax on anyone holding fiat currencies long-term.

However, if we go deeper into what inflates, we find assets like houses and stocks, as well as, services like healthcare and education.

What do these have in common? One thing: government intervention.

These industries can keep their prices high because the vast majority of their revenue ultimately comes from government subsidies, government backed loans, and other governmental programs.

For instance, houses are backed by mortgages, backed by banks, backed by the government.

The stock market is propped up by The Fed’s support, through endless stimulus.

Healthcare knows the insurance companies will financially support most of their customers and if not, the government can always step in with additional assistance.

And higher education institutions raise their rates every year because they know that Uncle Sam will be providing the loans to (naïve) 18 year old kids hoping for a better career.

So with all that said, what would happen if the “free markets” didn’t have unlimited access to newly printed Greenbacks?

And can we truly call them “free markets” if the government selectively chooses what industries and sectors it helps?

The world’s economy, (because of technological advances), is massively deflationary.

Unfortunately, the government has created a hidden tax on all of us, called inflation.