The first thing to acknowledge is that inflation fundamentally arises from an overabundance of CASH and a relative scarcity of RESOURCES.⁣
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We’ve seen both of these occur over the last 1-2 years.⁣
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The money handouts that occurred during COVID were not really “free money” and had to be repaid at some point.⁣
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The relative abundance of money versus resources it can be used to purchase means that there is an oversupply. When something is in oversupply its value goes DOWN.⁣
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This is of course due to the laws of supply and demand.⁣
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Central Banks can control money supply in two ways:⁣
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   1. Quantitative easing. (money printing)⁣

   2. Interest rates.⁣

Increasing interest rates will make borrowing less attractive as the repayment rate (interest rate) is much higher. This means it is more expensive to borrow money.⁣
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This means it is much less lucrative for individuals and companies to obtain credit (borrow). They have less money to spend and therefore money supply in the economy decreases.⁣
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Interestingly, 97% of all capital is actually credit. You can imagine how much of an effect this has on money supply when it dries up.⁣
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Inflation is often called “Taxation without consent” as it allows the Government to reclaim the value of our wealth without us giving the “ok”.⁣
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We CAN’T control inflation but we CAN control how we protect our wealth against it. It starts with educating ourselves on money and how it works.⁣
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The point of this group is to provide that information and thus empower dentists.⁣
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*Not Financial Advice⁣⁣
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Disclaimer: The content on this blog is meant for informational purposes only and does not constitute financial advice. Readers should seek guidance from a professional financial advisor before making any investment decisions.