One key to understanding what is so tenuous about our current financial system is inflation.

Inflation doesn’t just mean prices are going up. Inflation is an increase in the money supply. Increasing money does not inject itself evenly into the actual economy. It inflates particular assets – like real estate, for example.

What happens concurrently with an increase in the money supply is a reduction in savings and earning potential for the average middle class person. Middle class people typically can’t afford to invest in equities and investment properties, which is what inflation helps to increase in value. This is what has dramatically increased the gap between the rich and the poor. Inflation doesn’t boost the economy. It increases the assets of a fractional percentage of the population.

Nixon taking the U.S. off the gold standard in the 1970s is what ultimately made this whole inflation concept unsustainable, but arguably even before that the banking system was still based around a war economy. With the government taking over control of the financial system with the Federal Reserve in 1913, its constitutionally questionable role as a private bank helps us understand its primary function.

The Federal Reserve’s role is to fund the government. The Treasury works out how much it needs to pay for various government projects so it sells bonds to banks to cover the costs. Then the banks take these bonds and sell them to the Federal Reserve.

A bond is a promise to pay back a loan plus interest with agreed upon terms. It differs from individual loans that need collateral to borrow against. A government that borrows in bonds only has to promise to pay the money back – no collateral necessary except maybe public trust. Having a large pool of buyers means that in an ideal scenario (low-unemployment and strong economy), governments don’t have to pay quite as much back.

That kind of worked for a while. The problem is when the bonds were due, they weren’t getting paid back. The Federal Reserve found a way out of paying back debt in full. They could just print more money, reducing the buying power of the dollar.

For example: if you borrow $100 today and spend it immediately, but in a few years that $100 is now valued at $80, then you’ve gained $20. This combined with low interest rates is what is called debasement. Keeping interest rates below the rate of inflation is how governments essentially try to inflate their debt away.

What this does to the average citizen is significantly reduce their savings built up for retirement. Apparently, American savings accounts have lost close to $500 billion in interest income since the 2008 sub-prime crisis. This is why the middle class is disappearing. The majority of Americans are now 40% poorer than they were in 2007.

The elite who are running the economy are essentially playing Monopoly. It is entirely speculative at this point – and American citizens bear the worst of it. Not just American citizens either, mind you. All nations involved in this agreement with the U.S. dollar as reserve currency are getting swept up in the shenanigans. Governments are gambling, essentially, and whenever they lose, the onus is on the taxpayer.

We saw that with the bank bailouts. Average citizens don’t get a bail out when they cannot pay back their debts, yet banks do? That just straight up isn’t lawful.

Alan Greenspan, former chairman of the Federal Reserve, funneled tons of cheap credit into the economy in the 1990s to inflate real estate and tech bubbles. He did this by separating interest rates from the actual economy. We saw this implode when the dot com bubble burst in the early 2000s.

Pretending inflation was low allowed policy makers to claim that wage earners were making more than they actually were, which was the result of just printing more money. On paper, this put many wage earners into higher tax brackets, thus reducing Social Security payments.

The majority of the baby boomers will have fully retired from the workforce over the next few years, with trillions in unfunded pension liabilities in both the public and private sphere. They benefited from this financial system more than any other generation, yet with their retirement funds clocking in somewhere at $80-90 trillion (that currently doesn’t exist), what does that mean for those still actively part of the workforce?

In addition, many of the jobs the boomers are leaving will no longer exist once they retire. Healthcare costs will also be soaring with a large increase in the senior citizen population. Thanks to globalization, many jobs have been outsourced to other developing nations.

The American Dream was basically a marketing campaign. The dream that was will soon no longer exist. The benefit of its destruction is that something bigger and less rooted in individualism and the single-family home will emerge in its place.