A reader – who is also a landlord – is in the unpleasant position of having to charge his tenants more for the same thing.
Which is unpleasant, of course, because the tenants perceive this as an increase in the cost of their rent when in fact it is merely an increase in the cost of inflation – which everyone is paying, including my landlord friend.
His choice is to accept less in rent – via worth less dollars – or adjust the rent to reflect the diminishing value of those dollars. In other words, his choice is to lose money via the diminished value of the dollars he receives in rent. Or compensate for it by increasing the amount – in dollars – he charges, to make up for what he would otherwise lose.
My landlord friend is a nice guy but he cannot afford to stay in business by losing money – and his tenants should understand that if he were to go out of business as a landlord, they would no longer have a place to stay, either.
The landlord isn’t earning any more value/purchasing power via the increased rental payments. He is merely treading water. It’s true he is collecting more dollars – but these have the same purchasing power as the sum as the fewer dollars he was collecting in rent before.
The tenants aren’t paying more in actual rent, either – but they are having to earn more money (or spend less on other things) to be able to continue paying the landlord the equivalent in value of what they were paying previously. This is rougher on them, of course – unless they can figure a way to increase their income to compensate for the loss in value of their current income.
My landlord friend lacks the power to inflate the currency and thereby decrease the purchasing power of the currency. He is not victimizing them. Indeed, he is a victim, too.
No less afflicted by inflation than his tenants in that everything he needs to buy with currency now takes more currency and – like them – he must either find a way to earn more currency or spend less of the currency he has on the things he needs.
Both – all of us – ought to focus on the source of these troubles, which is the fiat money system and those who are able to manipulate it to their advantage.
Fiat money is essentially whim money. It can be anything those with the power to force us to use it as currency say it is, according to their fiat. Pieces of paper. Digits created on a computer screen, at the touch of a keystroke. Since it can be created at whim, its quantity – and thus, its value – can also be altered at whim. In such a way as to benefit those who have the power to alter it.
Gold and silver are also of intrinsic value – meaning, they are valuable in themselves. Unlike a piece of paper, which is of little value in itself. Gold and silver are also real – and rare. The latter being part of the source of their intrinsic value. Neither can be inflated – so long as no one is capable of hey, presto’ing! into existence new silver and gold. It is therefore a stable form of money. The value does increase – and decrease – but its range of value can never be as extreme (especially to the left side of the spectrum; i.e., the worthless end of the spectrum) as that of fiat currency.
But people who want to be in a position to extract value from people like fiat currency – because they can take away value (and pocket it) without resorting to the obvious method of physically taking currency, as via a tax. You keep every piece of paper you’ve got. Those pieces of paper are simply gradually – sometimes, suddenly – of less or even no value.
It’s as ingenious as it is vicious – because it turns the understandable anger of people such as my landlord’s tenants upon him rather than the people who put him in the position of having to raise his rent, so as to be able to continue being able to offer rentals. Instead of seeing him as their benefactor he is transformed into their enemy. They resent him – and he is placed in the ugly position of seeming to them to deserve it.
All of us ought to ask why we’re paying more for the same things. Why we have more dollars – but less wealth.
It’s not because the rent went up. Or because the supermarket is charging $12 for a couple of pork chops that cost $6 just ten months ago. The pork chops are the same – and so is the rent.
But we all have less purchasing power – because of the unseen theft of value that is inflation.
. . .
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