According to the U.S. Department of Labor’s Bureau of Labor Statistics, there are nearly 31 million people currently unemployed — that’s including those involuntarily working parttime and those who want a job, but have given up on trying to find one. In the face of the worst economic upheaval since the Great Depression, millions of Americans are hurting. “The Decline: The Geography of a Recession,” as created by labor writer LaToya Egwuekwe, serves as a vivid representation of just how much. Watch the deteriorating transformation of the U.S. economy from January 2007 — approximately one year before the start of the recession — to the most recent unemployment data available today.

He went on to describe microfinance and the power of helping people that needed small amounts of capital to lift themselves out of poverty. Because of the nature of the loans and the social structures the re-payment rate is very high (well above 90%). In a small village many of these loans were taken out in groups. The group structure provided the needed pressure for individuals to pay loans back. Most of the loans were for a short period of time; less than 90 days.

The problem with microfinance came when he discussed the interest rate they charged on these loans. A one month loan would have a 10% fee. These kinds of interest rates are still the norm even today.

APRs over 120%….Are you kidding me?

This summit was attended by MBAs from the best schools in the nation. Mike Murray seemed like a very nice person and very intelligent. Why wasn’t anyone asking the question about the absurd interest rate? If the default rate was higher I could understand the lending rate being higher. An annual percentage rate of 120% being sold as “helping end poverty” seemed wrong to me.

I love the idea of microfinance and helping entrepreneurs in 3rd world countries. Are there any microfinance organizations that don’t charge “pay day loan” type fees and interest rates?

Primarily I wanted to see the difference between self made and inherited wealth. Inherited wealth always seems like a cheap way to be included on this list. Those people that inherited their wealth didn’t have to work as hard for their money. As I looked through the pictures and read the stories of each billionaire it became evident that those billionaires that inherited their money are less attractive than those that had to earn it. I know that is really shallow but go take a look for yourself. You’ll likely come to the same conclusion.

The other thing that stood out to me is that the only women on the list inherited their fortunes, none of them earned their fortunes. Take that as you will but the fact remains. In the future this may change. 60 years ago segregation and all kinds of social prejudice ran rampant. Only time will tell if this will change.

Lastly, I looked for any correlation between countries that fostered entrepreneurs (thus having more self-made billionaires) and the average income per capita. Using PPP (Purchasing Power Parity) as a guide to the average person’s wealth I found some interesting factors.

1)The middle east had more self made billionaires that what I would have expected.

2)The USA, Hong Kong, and the Middle East have about the same ratio of self made to inherited fortunes.

3)Europe and India both have similar ratios.

4)Russia surprised me by even making the list. Changing from a communist to a free market government would make any inheritance impossible. As the couple generations pass their ratio should change.

The result of these Keynesian policies is inflation. Inflation is a tool used to transfer wealth from producers to worthless bureaucrats and their pet projects. As the government becomes more desperate for cash, they will increase the flow of paper money (fiat currency) until the entire financial system becomes insoluble. As the American dollar weakens, foreign countries will sell their bonds and flood the market with devalued currency. You can expect inflation like the U.S. has never experienced. The cost of items will skyrocket and your wages will stay the same. Those in power will blame the free market and capitalism but the real cause of the fall will be their failed economic policies.

Woman Burning Paper Money for Heat

Wheelbarrow of Worthless Money

Sweeping paper money from the streets in Hungary

Making a fort is fun!

Woman burning cash in stove to cook with.

Recent Inflation in Zimbabwe Africa

Man carrying arm loads of cash

Starving billionaires.

Zimbabwe Paper Money Used as Toilet Paper

Hyper Inflation in the USA (what it might look like)

The amount of cash injected to save the country has a real possibility of destablizing the US currency and increases the chance of total collapse.

Buying food could be very difficult with hyperinflation.

List of countries which experienced hyperinflation

Angola 1991-1995

Zimbabwe 2004-2009

With fiat money there is almost a guarantee of hyperinflation given enough time. To defend yourself buy things with intrinsic value (e.g. food, shelter, gold, silver, land). Things with inherent worth will always be worth something. The same can’t be said for paper money.