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Hello, Subscriber!
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In the process of investing, one loans their capital to a manager, entrepreneur, or business that has designs on putting that capital to work to produce a product or service and, through sales, creates revenue and profit. As a very general rule of thumb, a manufacturer or service provider usually needs to sell their product or service for three times (3x) what it cost to produce the product or provide the service. While that might sound like extortion, it's simply reality.
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Manufacturers, for example, must put up money to house the operation, buy the equipment, find the employees, train them, cover their expenses and benefits, order in the materials, pay the utility bills, and the taxes, manage the shipping, etc, etc, etc. They start very much "in the hole" and need to pay back any money they borrowed, and very often their own private capital, with interest. All of those "expenses" must be covered by revenue (cash flow of sales) while providing a significant sum over and above the necessary expenses as profit, or the enterprise isn't worth anyone's time and effort.
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Such is "capitalism"; putting capital to work to create goods and services so that we can create profit. Most people ignorantly skip the "...to create goods and services" portion and jump directly to the profit end as if such happens by magic, the entrepreneur didn't work for it, and therefore doesn't deserve to claim it as their property. Ignorance of the principles of business abounds in our culture. The larger concept, of which "capitalism" or putting capital to work, as just one portion of the more grand concept known as "free enterprise". Again, most people ignorantly confuse the two.
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The Rule of 72 is a simple guide, involving simple math, to relate how many years it will take, or at what rate an investment will double. The formula, 72/% = Y @2x assumes a doubling of your original value (2x). So if we have a rate of 10%, 72/10 tells us our money will double in 7.2 years all factors remaining consistent. In like fashion, if we want our money to double in 5 years, we can divide 72 by 5 and net the rate of return (14.4%) needed to net us the performance of "doubling our money" in the 5-year term.
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The factors of the "time value of money" are the same for investment and growing of capital as they are for interest on loans and, in our current economic environment, the rate of inflation and how these factors are working against us. For certain, rates of interest can and are applied in our favor as investors, and against us as borrowers or in the case of inflation; a currency's loss of value related to its over-abundance.
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Welcome to Fantasy Island!
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Below is a chart representing the current CPI reported inflation index published by the Bureau of Labor Statistics ("BLS"; a government agency) and similar information base on how such was calculated over 40 years ago by 1980 factors, at the tail end of another major recession/depression in American history. A point I've made previously and at the risk of beating a dead horse, I'll make again: "there's what government agencies tell us, and then there's the truth." If at this point in time you believe anything that comes from the government service corporations running "Amerika" at face value, you are not giving your nation the attention it deserves considering you are to be "self-governing", or you are not getting your information from reliable sources. Pardon my indiscretion in stating such so abruptly, but, those are our responsibilities as Americans. Our nation and its people are in serious jeopardy; the time for cordial repartee is past: "if the boot fits, kick yourself with it."
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What BLS and most government agencies do when the numbers cast an appalling light on their activities, is change the means by which the numbers are calculated; which is the case with the CPI. Recent characteristic actions also reveal that when things aren't going their way or aren't responding to their "prodding", they will also "redefine terms" so that those running the country into the ground don't need to face the music. The current CPI is calculated on "alternate items which fulfill a similar function", a bait and switch operation of government called "hedonics". I've written of this practice before, over four years ago. Here's a quote from "The Thinly Veiled Hedonic Economy":
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"It’s called hedonics or more accurately “hedonic pricing”. Basically, if an 8-oz sirloin steak was priced in 1970 as a source of protein in our basket, we can substitute 8-oz of hamburger or chicken breast since each is a source of dietary protein. If we’re measuring economic inflation, the measure must be apples to apples or it isn’t a reliable measurement. The resulting numbers might “feel better”, but the measurement isn’t real." [dp]
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What has this this disingenuous practice devolved into? They are now considering something akin to "cricket loaf" as a source of protein. Those concerned for the welfare of the planet over its people intend for you to eat "insect-based" protein. I prefer a nice steak, thanks much! You haven't heard this story? Find a new source of information; the one you're currently following is not providing you with what you need to know.
This week, CPI rates for consumer levels of inflation were estimated at 8.3%. By the rule of 72 (72/8.3), prices on consumer goods will double in just over eight and one-half years (8.7) if current levels of inflation persist. A gallon of milk, now $3.70 a gallon, will be nearly $7.50. Gasoline, currently $4.00 a gallon, will be approaching $10.00 at $8.00 per gallon. Considering the mind-set of those pushing the "green-energy agenda", you can expect the supply of gasoline to be repressed and therefore any demand with less supply drives prices up even more.
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The Truth:
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The truth, however, is that real consumer price levels which are based on the same "basket of consumer goods" that was tracked back in 1980 show the current rate of inflation at nearly 17%. Taking another quick look at the rule of 72, that suggests that prices on most consumer goods will be twice what they are currently in as little as 4.23 years (72/17 = 4.23). Is your paycheck likely to double in that time frame? Will your business revenue double as the world and your community around you devolve into a third-world nation where people wonder where their next meal might come from? Your client and customer base might drop significantly, or drop to zero.
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At that 17% rate, all factors remaining consistent, the $3.70 gallon of milk is priced at $6.93 in 5 years, and $15.20 in ten; for a gallon of milk! Gasoline presently at $4.00 per gallon becomes $7.50 per gallon in 5 years, and $16.43 in ten. A $200 trip to the grocery store this week will be more like $375 in 5 years, and an astounding $822 in ten. Want to discuss something "unsustainable"... that's unsustainable. The real kicker, and what many don't understand, is "the milk will not have changed"... it's the currency that's losing value, requiring more currency units in trade for the same item.
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It's well past time to "get involved" in your community. Short-term, find like-minded people who are willing to coordinate cultivating gardens and livestock (chickens, eggs, sheep...) where trading among the community is established and vibrant... and do it long before it's needed. That is to ensure that you'll be alive to make the necessary contribution to your society, your community, which establishes government, to whom government owes it's "service", by which contractual agreement (called a constitution) the people can directly affect government by lawful action, and change the direction of where the globalists are wanting to drive our nation and the rest of the world.
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Sorry to be the bearer of bad news, but the globalists running things have an agenda that does not consider your participation and welfare "in their best interests". The sustainability of your life and life-style is not among their priorities because frankly they hope you won't be around to "clutter up their agenda".
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They currently control the food supply chain, the availability of potable water, the supply and distribution of energy, the freedom of travel to destinations of your choice, and are well on the way to claiming control over the money supply (digital currency can be shut off, controlled for where it can be spent), and your use of energy by fuel in your automobile or by the energy that runs your home (see stories this week on heating one's home in Switzerland). Our society has become "dependent" upon government service providers that see no responsibility to "provide the people with honorable service". That needs to change.
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What do you intend to do about any of it?
Thinking "it's someone else's job" got us where we are now.
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The Rule of 72 bases it's rate of doubling capital on the term, or span of time, of how many years?
[see end of email for the answer]
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If you find this interesting or helpful, please share it.
Here's some more noteworthy information:
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Is Facebook Spying on you for the FBI?
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One of Dan Bongino's better efforts... In this episode, Dan covers the liability of government enrolling private industry to do things that government is not authorized to do. That's not lawful. People doing such belong in jail or worse; for acts of sedition and treason.
Dan Bongino on the Dan Bongino Show [LINK]
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...330 Mines in 12 Years...
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I learned at the outset of my investing interests that commodities have two general sources: mining and agriculture; dig it or grow it. There are currently no other options. Without actually targeting environmental or economic factors, this article reviews the impact of the "green-energy revolution" for the reasonably thoughtful.
Reuben Adams on Stockhead [LINK]
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James Turk on King World News
"See gold and silver as avenues to protect your wealth." says James Turk about the unsustainable degrading of the value of world currencies against anything tangible. My thought of US Dollar's apparent strength, "in the land of the blind, the one-eyed man is king".
[LINK]
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I've moved my financial services business from public to private. Learn how government policy like regulations and taxes can be kicked to the curb!
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The practice of substituting, for the sake of government statistics reports, one item of "similar function" but not of "similar value" is called _________ .
[see end of email for the answer]
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Merch helps keep your eye on what's important:
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(t-shirt promotion / discount code)
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MoneySmart Success
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Being "MoneySmart" is a matter of managing that which you have well so you have more to manage! And, as with the points made this week, know the difference between currency and "real money".
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Tee Ranter Patriotic Tee
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Everything you love hinges on your liberty, your freedom to pursue and obtain it. That concept in the USA has been so entrenched for so long that some don't realize what life would be like without it.
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MoneySmart Chapter Tours
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Having more money to manage is matter of the habits you use to manage the money you have! Check out the MoneySmart online chapter tours here:
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