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According to AP economic writer Martin Crutsinger, wholesale inflation grew at a whopping 6.3% last year in 2007. This begs the question of whether or not you got a 10% raise last year to reflect the devaluation of your pay.

So let’s look at a real world example. Let’s say you get paid $50,000/year from your employer. If inflation grew at 6.3% then that $50,000 (in 2007) is now (in 2008) only worth $46,954.91 in purchasing power. That’s right, $3000 of purchasing power has disappeared and you didn’t have to do a thing! People wonder why they seem to struggle more and more each year and they don’t realize that the Federal Reserve’s inflationary policy erodes the value of their money, year after year.

If inflation keeps this pace then in 2009 that 50k salary will only buy $44,095 and it’s no wonder gold is at $900/oz these days.

In order for you to stay ahead in this game you would needed to have received a 6.3% raise just to stay even and a 10% raise if your company really appreciated you and wanted to reward you with an actual increase in salary & purchasing power.

You can read the whole article over at Yahoo and it is a bit depressing but don’t worry because politicians are standing by to give you a $500 tax cut to make up for losing $3000 last year.

So the new currency standard is as follows:

$100 bill = $10

$50 bill = $5

$20 bill = $2

$10 bill = $1

And it’s no wonder why you’ll go through $20 bills like $2 bills….