The Silent Stealing Of South African Wealth

in tax •  2 months ago 

Hey Jessinflated

Inflation is an idiots guide to getting rich, so many people are chasing nominal gains in this world that they don't realise the debasement of purchasing power they have normalised it. They are okay with the fact that everything gets more expensive.

The micro-economic changes are visible and accepted, but the macro-economic changes are hidden and far more painful. The opportunity costs lost to inflation is not even measurable at this point.

Inflation creates a club of elitists, and if you know nothing about inflation, then you're probably not in the club. You're in the club where they use inflation to club you over the head and make you fight it out with the rest of the serfs for scraps.

To quote Miranda Tate, on inflation:

You see, it's the slow knife, the knife that takes its time, the knife that waits years without forgetting, then slips quietly between the bones, that's the knife, that cuts deepest.

Lol okay, she was talking about revenge for Batman killing her father, but I think it's still fitting.

Inflation for every nation

As you can see inflation is like coronavirus, some of the countries have it far worse than others, this could be through the shitty implementation of monetary policy, corruption, increase in big government and the welfare state as well as the level of dollar-denominated debt floating around with your countries name on it and the taxpayers on the line for it.

As you can see from this graph, South Africa sits in the 4-7% range, which is a crock of shit, its just so bad that with hedonic adjustments the lie could only reduce it to that range without people noticing that its a bunch of bullshit.

Inflation across nations

Image source: - wikipedia.org

Taxation without representation

As they say, death and taxes are somethings you cannot avoid, the average South African already pays

  • 15% VAT on all purchases,
  • Income tax + UIF and PAYE
  • Sin tax on
  • Capital gains tax
  • Petrol tax

Depending on the way you consume or live your life, you may have more or less tax liabilities but for the vast majority you stuck with those 5 when trying to be a functional member of society.

The one tax we don't often speak of is the tax on our money, on choosing to HODL South African Rands we're taxed to death.

Yes, people are dying because of how inflation prices them out of being able to have a living or even shelter, inflation is a humanitarian issue in this country, one we do not speak of because we don't know to bitch about it.

If you consider the best effective savings rate you can now get in South Africa has dropped from 7.25 to 3.30%, and the inflation rate hovers between 4.2 - 7% then you're effectively getting taxed on that difference.

The rand has lost 72% of its value in the last 10 years when compared to gold making it one of the worst currencies on the planet if this doesn't scream we're heading to another Zimbabwe or Venezuela then I don't know what does. At least those countries were sanctioned to death, this is our own doing.

To put into contrast Bitcoin is up %9 000 0000 in purchasing power.

While your money may stay the same in nominal fees in your hand as cash or your account, it is worth far less in the open market.

Inflation protection

At this point, if you're not convinced in buying something that doesn't tax your face off regardless of what you do with it, then you're never going to convince. You can hold billion, jewellery or Krugerrands or other coins like the Canadian Maple Leaf or The Silver Eagle as long as its legit, or you can HODL the best money ever made, BTC baby!!

These inflation margins may seem small and insignificant to some, but they compound over time. Those who react will maintain their wealth and transfer some to them, while those who don't will continue to lose their wealth to the state and national debt holders.

Have your say

What do you good people of HIVE think? How are you reducing your inflation risk?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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Inflation is taxation without legislation.
Let's hope BTC will end this kind of theft.

You can’t escape it you can only try to reduce the pain and lose to it slower! I do hope BTC does, I have a lot counting by on it

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We are having our wealth taken by inflation in Australia as well. It's basically a hidden tax😠

It’s the tax that keeps changing too depending on your purchase behaviour you take in more of that tax or less. It’s horrible also makes owning things like a home or an asset like gold even harder! They creating a sink hole that is gobbling all of us from the bottom up

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One of the best blogpost of you for some time. It is hard to explain for people that they loose money even if the bank gives them rate.

I had a discussion with a friend - what is best if you want to avoid inflation? Gold, Stocks, House (no one talks about crypto because its volatility. Is is more an investment with high risk than a hedge for inflation - so far.
What do you think - I do not always lika gold as a SURE no inflation investment because it is so much trading in it.

Thanks that’s very kind of you and yes I agree I get the same response people are so used to ALL prices go up and have made inflation seem normal when it’s not

I think reducing your inflation burden you can go for gold or silver but you will need to take physical delivery if not you have to still pay holding costs which eats into your “profit”! Trading paper gold and ETFs isn’t the same thing and they can be hit when markets sell off and margin calls need to be paid

I think that crypto does okay if you got in ag a coin at the bottom you can ride the price movements let’s say you got in at 3K on BTC you are so far up you don’t need to worry about infaltion but That’s not for everybody

The best hedge against inflation is still cash flow so if you can generate cash from your labour or your renting of property you can always ajust that and then make sure you convert some of it into gold or try to reinvest to beat inflation at a higher rate!

I should not tell someone to save in crypto - if they only want to avoid inflation. That person is a "safe-saver" - but will not get much from it.