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> Governments – How they can destroy your savings

How governments can destroy your

savings to finance their deficits

A deficit is the amount by which a sum falls short of some reference amount. In economics,
a deficit is an excess of expenditure over revenue in a given time period.

In this article, using Gross Domestic Product (GDP) calculations, I will explain how your

personal wealth is being effectively destroyed by your government, for the purpose of
financing its own existence.

The financial system of a country links the money saved to the money invested in that

economy. There are two main linkages between savers and investors, namely the stock
market and the bond market. Both of these are sources of borrowing money which are

regulated by the forces of supply and demand.

The difference between the bonds and stocks is;

-Bond holders loan money to institutions and governments in exchange for yield and
repayable principle after a set period.

-The stock holders claim part ownership of the businesses that they invest in.

Both of these are usually direct, open, sources of capital.

There are also indirect capital sources called Financial Intermediaries. These include Banks

and Investment Funds.