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Savers End Up Losing 

In the days when the dollar was backed by gold and banks paid a healthy 

interest rate and inflation did not really exist, saving money was a solid, 

although boring, way to make money.

Those days are over. The U.S. Dollar is no longer backed by gold. This 

has created the huge credit explosion we live in today. But with credit, and 

no gold backing the dollar, debt has run rampant.

I’m not talking about individual debt; I’m talking about government 

debt. And the government’s answer to excessive debt is to print more 

money. This allows the government to pay off their debt with cheaper, less-

valuable dollars. When the government prints this money—basically out of 

thin air- then your savings will be worth less and less. This also forces 

people to work harder just to keep up with the cost of living. 

Think of it as the lessons you learned about supply and demand. 

When supply is more than the demand, the value drops. That is what is 

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2. Start Saving

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Step 2: 

Advanced Guide to Getting out of Bad Debt

happening. There are more dollars than necessary, so the value of the dollar 

drops. This causes prices to rise because your dollar becomes worth less and 

less; this is called inflation. When there is inflation, debtors are the winners 

and savers are the losers. 

In 2008, the U.S. government and Federal Reserve Bank began printing 

trillions of dollars, causing millions of savers to be losers via the loss of 

purchasing power due to inflation, higher taxes, and low interest rates on 

their savings.

The entire modern monetary system is based upon 

inflation. The banks 

and governments want inflation. Why? 

One reason is so that debtors 

can pay back 

their debt with cheaper dollars. Another reason is because 

consumers spend money faster if they expect prices to go higher.

All I am saying is that’s what happens when you have 

an economy that 

grows on inflation rather than production. Savers become losers and life 

becomes harder because life becomes more expensive. Inflation motivates 

many people to become consumers rather than investors. They eat, drink, 

and shop, because tomorrow's prices may be higher. 

All that is why I tell you savers are losers—except in this one instance: