Barter with your bank

A friend and I were talking about winning a million dollars in the lottery. Even at 4% which pays like $40,000 a year, you have to put $30,000 back in to keep up with inflation. It looks like inflation is going to go up much higher than interest rates. Banks only give special deals to rich people who they think will bring more business in to the bank. Lottery winners are not on the 'in' list. 

Basically, you can't win. Inflation exists to keep working people down. Think about it. Barter has no inflation. If there are many sharp stones around and few shiny stones, the rate of exchange of sharp stones to shiny stones will increase. Inflation. If the demand for pelts drops and the demand for salt goes up, the rate of exchange of pelts for salt will drop. Deflation.

Guns vs butter.

Try telling that to your bank. Try telling that to the tax man. Governments hate barter because they make no taxes off the transaction. Hillery Clinton said it best. "We tax everything." Every time money moves our beloved government takes a slice. If you leave your money sitting, inflation eats it alive. You have to struggle just to tread water. That is how the government likes it.

If you have an economy based nearly very much on barter you end up with Haiti. Millions of people with few government amenities and little regulation, such as building codes. When something bad happens, you get a poor response and much more damage than might have been. In the good times less than half the population had clean drinking water and less than a third had proper sewage.

Balance is the key.