Know the Game - Level 1 (4/22)

Inflation Is Theft: Here’s the Proof

Almost everybody feels inflation long before they understand it. Groceries jump. Rent renews higher. Savings shrink. You work harder every year, yet life never feels lighter.

People shrug and say, “That’s just inflation.” They treat it like weather - something you can’t control.

But inflation isn’t weather. It’s policy. It’s design. And more importantly, it’s a quiet transfer of your time and effort into someone else’s hands.

None of this is happening because you’re “bad with money.” You’re playing a game where the rules quietly change in the background and nobody told you how it works.

1. The Lie You Were Told About Inflation

Everyone is trained to believe inflation means “prices went up.” That’s the surface-level shockwave, not the earthquake. Inflation begins when the money supply expands - when more currency units are created, intentionally or indirectly.

Once more dollars exist, each dollar becomes weaker. Prices don’t really rise - your currency sinks.

The inflation number you see in the news is called the Consumer Price Index (CPI). It’s based on a “basket” of goods and services, averaged out across the entire country. The problem? It doesn’t match your actual life. CPI doesn’t properly include energy costs or taxes - two of your biggest, non-optional expenses. And the categories that matter most to survival (housing, food, childcare, healthcare) often inflate far faster than the “official” number.

CPI also resets every year. So if CPI was 2.9% last year and 1.9% this year, that doesn’t mean prices went down by 1%. It means prices went up again - on top of last year’s increase, only by 1.9%.

Example: If eggs were $5.00 last year and CPI says 2% this year, that’s now $5.10, and that’s after inflation already raised the price the year before. It compounds. Nothing gets cheaper. The baseline keeps rising.

2. Inflation Is the Theft of Your Time

Money is just stored work. It’s proof that you exchanged your energy, skill, and time for value. When inflation rises, the currency holding that value weakens - which means your stored time is stolen in slow motion.

If you saved $10,000 and inflation runs at 10% a year, your buying power falls to $9,000 without a single decision from you, every year. You didn’t spend recklessly. You didn’t make a mistake. The system simply removed value from your life.

Put into hours:

If you earn $50,000 a year and inflation is 8%, roughly one month of your work evaporates just to keep pace. That’s a month of your life surrendered to a mechanism you never agreed to.

Think about it in a simple, everyday way:

• You set aside $200 a month for groceries.
• Last year, that filled the cart.
• This year, for the same $200, you walk out with less food.

You didn’t suddenly become irresponsible. Your container for stored time (your money) leaked.

3. The System Shift: Productivity Up, Wages Flat

Something structural broke in the 1970s: productivity kept rising, but wages stopped keeping up. Workers produced more every decade, yet compensation fell behind the value they created.

Where did the difference go?

• Asset owners captured the upside.
• Corporations leveraged cheap debt to scale.
• Financial institutions benefited from credit creation.

Inflation accelerates this imbalance because new money flows into asset markets first. That’s why real estate, stocks, and scarce assets inflate faster than your paycheck.

You’re not imagining the gap. It is engineered by incentives.

4. The Inflation Treadmill: Why Life Gets Harder Every Year

Here’s the most honest way to explain inflation: it’s a treadmill that speeds up without warning. You run faster (get raises, pick up side work, stay disciplined) but the belt moves faster too.

You see it in three ways:

• Shrinkflation: Same price, smaller package.
• Skimpflation: Lower quality at the same cost.
• Lifestyle inflation: Basic life milestones require far more money than before.

And the clearest examples come from the last 30 years:

Housing: A median home in the '90s cost around $130,000. Today, it’s easily triple that in many areas. Houses didn’t suddenly become three times more magical - the currency lost strength.

Income: One income used to support a family. Today it often takes two incomes plus debt just to stay afloat.

Food: Staples have risen 30-80% in a decade. The food isn’t evolving into something legendary - the dollar is weakening.

Back to that grocery example:

• Year 1: $150 fills most of the cart.
• Year 3: $150 fills two-thirds of the cart.
• Year 5: $150 feels like a “top-up,” not a full shop.

The treadmill metaphor is accurate: the effort is real, but the system ensures you don’t feel progress.

5. Why Young Men Get Hit the Hardest

If you’re a young man today, you feel inflation more intensely than previous generations. Not because you’re weak or lazy, but because you’re entering adulthood at the bottom of a steep hill.

• You have the lowest wages of your lifetime.
• You own the fewest assets.
• You face the highest cost of entry into housing.
• You’re more likely renting than owning.
• You often carry debt before holding any real assets.

You’re absorbing the blow with no shield. The pressure, frustration, and “why can’t I get ahead?” loop is not your fault - it’s structural. Inflation hits hardest at the exact stage where men are trying to build a foundation.

Women and families experience this squeeze too, but young men often feel it first and most directly because they’re expected to “stand up,” provide, and build from scratch in a system tilted against early builders.

6. The Winners of Inflation (Follow the Incentives)

If inflation steals from some, someone must be gaining. The winners aren’t mysterious. They’re simply aligned with the structure:

• Governments reduce the real cost of their debt.
• Banks profit from creating credit - money that didn’t exist before.
• Corporations borrow cheaply and inflate share prices.
• Asset owners ride the wave of expanding money supply.

Everyone else pays the difference.

7. When Money Loses Integrity, Society Loses Stability

Inflation does more than raise prices. It distorts behavior. People stop saving because holding cash feels pointless. Planning collapses under uncertainty. Long-term thinking disappears. Debt becomes normal. Anxiety becomes the default state.

And when inflation accelerates too fast, it turns into something more dangerous: hyperinflation. That’s when money loses trust completely.

Real examples:

• Bulgaria, 1997: Over 2,000% inflation. Prices changed daily. People paid for their meal when they sat down because it could cost more by the time they finished eating. Can you even imagine that? 
• Turkey, 2020-present: Yearly Inflation repeatedly over 50-80%. Salaries lose meaning. People rush to spend their paycheck immediately - waiting is a guaranteed loss.
  In Turkey, savers were kept in low interest rates while prices ran high so your bank account was a guaranteed losing bet. Regulators discouraged foreign currency accounts and made it harder or more costly to switch into safer stores of value. The result? Ordinary people had fewer tools to defend their time and earnings. That’s what happens when money loses integrity, not just prices go up, but your options go down.
• Argentina, today: Inflation over 200% per year. Cash piles don’t represent wealth - they represent fear that tomorrow’s price will be worse.

In every case, the pattern is identical:

1. Money devalues
2. Trust erodes
3. People stop planning
4. Stability breaks

When money loses integrity, society loses the ability to think clearly about the future.

This isn’t rare. It’s the default failure mode of weak money systems. Over 700 currencies have died in history the exact same way - debasement, distrust, collapse.

8. The Sovereign Shift: Money Isn’t Wealth. Time Is

You’re taught to chase money. But money is just a container. Wealth is time under your control.

Weak money steals your past. Strong money protects your future.

This is the shift:

• You’re not accumulating dollars. You’re accumulating hours of your life in a container.
• The container matters.
• Real wealth is not just “how much you have,” but “how much optionality you have.”

Optionality means this: how many of your hours tomorrow are truly yours to direct, instead of being pre-sold to keep up with a system that keeps moving the goalposts?

Inflation attacks that optionality. It forces tradeoffs you didn’t choose: less rest, less margin, less time for what actually matters.

This isn’t the part where you change everything overnight. This is the part where you finally see the board clearly. So future moves are made with open eyes, not confusion and self-blame.

Next Reads

• → Know the Game #2: The Day the Dollar Died: 1971 in 7 Minutes #2/22
  

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