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For the Greater Good

Updated: Jun 8, 2023

I'm sure we're all open to a strategy that is going to benefit our own family's financial picture. What if I told you that implementing infinite banking actually benefits society as a whole as well? Now, without getting too far into Austrian economics or the causes of the boom and bust cycles, let's just all agree with one starting place: Inflation is bad. Before we talk about that, let's make sure that our definition of inflation is correct.

We've been conditioned to believe that inflation is simply a rise in the price of goods and services. In actuality, that increase is just a result of actual inflation. So what is inflation, really? It's simply an increase in the money supply. When the Federal Reserve decides to print more money, the supply is increased, and therefore the value of each dollar drops, and your paycheck can buy fewer of the goods and services you need each month.

Why does this happen? Let's take a quick detour for a history lesson. In 1971, Richard Nixon took the US off of the gold standard, temporarily. As with many other temporary measures taken by politicians, they often become permanent. This changed our currency from a gold-backed dollar to what's known as fiat currency, or, in layman's terms, backed by nothing more than the faith and confidence of the American people in their government. That also meant that, if bureaucrats in Washington DC needed more money for any one of their pet projects, gold did not have to be added to our stores in Fort Knox in order to get it. They now quite literally had a free money printer. What was the result of this on the buying power of the average American? I think the chart below speaks for itself. Notice when the abrupt incline started: right about 1971.

While printing trillions in new money is the biggest driver of inflation, it's not the only one. Banks today practice a lending strategy known as fractional reserve banking. This simply means that they are only required to have a fraction of their actual cash reserves on hand. Remember George Bailey in It's a Wonderful Life when there was a run on the Savings and Loan? He didn't have the money to give them. It was loaned out to others. Now just like George Bailey, the vast majority of our local bankers are wonderful people. But the very fact that the system promotes loaning out money that doesn't actually exist is another contributor to inflating the money supply.

I'm sure you're wondering by now....what does this have to do with my situation, and how can infinite banking help? Well, two things, really. First off, having your money growing inside of a dividend-paying life insurance contract is going to do a much better job of attempting to keep up with inflation than any other savings vehicle. In 2022, they money in your savings account actually lost buying power at a rate of roughly 7.5%...and that's factoring in the minuscule interest that you earned.

Secondly, and more importantly, financing purchases through policy loans is non-inflationary. Unlike banks, insurance companies must have in reserve 100% of the money to cover their obligations. That means that when you take a loan from them, no imaginary new money is created. The money supply is not inflated, and you are not contributing to the problem. The Infinite Banking Concept provides a sound money solution to the ever increasing financial woes of our economy. Will one person fix it? Of course not. However, part of Nelson Nash's vision was that if 10% of our population would adopt this way of doing things, it would affect serious change. IBC is a way of implementing a plan for financial sanity, both for you, and for the greater good.

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