What is Inflation?

Inflation is when the government makes money out of thin air and pours it into the economy.  The “money supply” is what is inflated, not consumer prices for goods.  The larger number of dollars available to buy the same number of items in the same economy leads to nearly-immediate price corrections to account for the new, lower value of the money . . . this leads to higher prices, which most people mistakenly believe to be the inflation.

For your consideration:

Note the near-perfect-fit positive correlation between the price of gas you see every day and the amount of “money” which you basically never hear about . . . this is not a coincidence.  It is the natural result of cranking up the printing presses in a fiat money system with fractional “reserve” requirements such as our own Federal Reserve system. This happens EVERYWHERE fiat money is used, but only to the degree the politicians allow it to happen.  Because our Congress controls the money supply, Congress is responsible for making everything you buy cost more dollars.  This is a sneaky way of taking your money by robbing you of purchasing power – it is a hidden tax, actually.  So next time you think how expensive everything has become, remember to thank your elected heroes for standing up for fiscal responsibility and not printing FIVE TRILLION fake new dollars out of thin air.  Oh wait, they did that.  Nevermind, carry on nothing to see here.

That this is what happens when a fiat system of money is used and forced on the people is demonstrated in the that your prices didn’t start skyrocketing until President “I am not a crook” Nixon closed the Gold Window (1971) and the money became worth essentially less than the paper it was printed on.  It is somewhat ironical that he did this to combat fears of inflation.

(I made this picture to illustrate this point and figured I’d share it with you since i went to the trouble of putting the image together.  I just grabbed the first two appropriate pictures I found in a quick Google search and left the website names on the images to be sure they get their credit for having the images in the first place.)

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