Articles
12¢ Hamburgers and $600 Cars, by Mark Brandly,
Mises Daily, 25 Oct 2006
Government agencies report price inflation. If they reported monetary inflation, the inflation estimates would be much higher. The Federal Reserve expands the money supply, driving prices up. However, by reporting price inflation as they do, the ruling elite lay claim to much lower inflation rates.
Along Pennsylvania Avenue, by
Murray N. Rothbard,
Faith and Freedom, Apr 1955
Discusses the 1955 $10,000 annual pay increase (about $90,000 in 2018) granted to themselves by members of the U.S. Congress, a proposed $20 annual tax cut, inflation and issues of statehood for Alaska and Hawaii (still dependent territories at the time)
Many unfortunate Americans live on more or less fixed incomes: ministers, teachers, widows, retired people. They cannot conveniently vote themselves increases when inflation eats away the value of their earnings. And how many of them boast a $15,000 income? The irony of the affair deepens when we realize who has caused this inflation. The answer is: Congress itself. Congress was responsible for the series of huge deficits (and the sale of government debt to the banks) ... Congressional inflation of the number of dollars available, caused the dilution of the purchasing power of each dollar.
Along Pennsylvania Avenue, by
Murray N. Rothbard,
Faith and Freedom, Feb 1956
Considers the "magical weapons" that economists have created to cure depressions and tame the boom-and-bust-cycle, and compares government inflation of the money supply to that of a gang of counterfeiters
Picture what your reaction would be if a group of counterfeiters printed new money, spent it, and then denounced the general public for causing inflation by spending too much! Picture your reaction if the gang used this as a reason for confiscating more of the public's money, and forced the people at gunpoint to spend their money in the ways the counterfeiters think best. But let's strip the present situation of the legalisms and the glitter, and ask ourselves: What's the difference? The answer is plain: one is authorized by law. But that's the only difference; the results are the same.
Are Southern Baptists About To Abandon Government Schools?, by Steven Yates, 29 May 2004
Examines a resolution proposed by Southern Baptists calling on parents to withdraw their children from the Pharaoh's (government) school system
We are producing a generation, moreover, whose reasoning abilities and capacity to evaluate information are astoundingly low. Just recently I had a conversation with an acquaintance who was complaining about the high price of gas. I pointed out that if you adjust for inflation, prices at the pumps were actually higher under the Carter Administration. "But I'm paying more today than anyone did then!" she retorted. It dawned on me that the concept of adjusting for inflation was simply beyond her. She had only the vaguest idea what I was talking about.
Austrian "Inflation," Austrian "Money," and Federal Reserve Policy, by
Richard H. Timberlake,
The Freeman, Sep 2000
Response to Joseph Salerno's Oct 1999
The Freeman article which critiqued Timberlake's essays in the April, May and June 1999 issues; discusses the words "inflation" and "money" and Federal Reserve policies, in an Austrian economics context
"Inflation" is a word that has emerged in economic thought ... because of institutional developments and intellectual progress in methods of economic measurement. It is useful as no other word can be for describing general price-level increases. Salerno's insistence, quoting Murray Rothbard, that it should mean only an increase in the stock of money "not consisting in, i.e., not covered by an increase [in the quantity] of gold," violates current meaning that the word has both for economists and the public. It deprives us of the word that most robustly describes a general increase in prices.
California's Energy Meltdown, by
George Reisman,
The Free Market, Mar 2001
Examines the causes underlying the problems of California's electric power system, countering those who claim they were due to deregulation and the free market
[T]he government's inflation of the money supply also contributes to power shortages ... [I]nflation contributes both to the increase in the demand for power and to the restriction of its supply. The former results largely from the rise in money incomes that the spending of the additional ... money brings about, and which gives people the ... means to afford larger quantities of any given good at any given price. The latter results from ... inflation [driving] up the costs of constructing and operating power plants and thus [reducing] their profitability in the face of controlled selling prices.
Cantillon, Richard (c. 1680-1734), by
George H. Smith,
The Encyclopedia of Libertarianism, 15 Aug 2008
Biographical and bibliographical essay
Cantillon offered a detailed analysis of inflation. Although the "quantity theory" of money, according to which the injection of new money will cause a general increase of prices, was known to earlier theorists (e.g., John Locke), Cantillon was the first to explain the differential effects of inflation on the structure of prices. This differential impact, which depends on which segments of the economy are the earliest recipients of the new money, has become known as the "Cantillon effect."
The Case for the Barbarous Relic, by
Llewellyn H. Rockwell, Jr., 26 Jul 2006
Argues for a return to the gold stndard by reviewing U.S. political, economic and monetary history; from talk presented in New York City on 21 March 2006
[N]o one in the modern age has explained this point with more exuberant satisfaction than Ben Bernanke ...:
The U.S. government has a technology ... that allows it to produce as many U.S. dollars as it wishes at essentially no cost ... We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Even from his own remarks, we can clearly see that he is wrong that the power to create money comes without cost. Since 1970, the value of the dollar in terms of goods and services has dropped dramatically to 19 cents.
Related Topics:
George W. Bush,
Federal Reserve System,
Gold Standard,
Government,
Warren G. Harding,
Thomas Jefferson,
Ludwig von Mises,
Money,
Franz Oppenheimer,
Murray N. Rothbard,
Socialism
Crushed by the Fed, by Glenn Jacobs,
Freedom Daily, Jan 2008
Discusses the role of the Federal Reserve in supposedly "controlling inflation and running the economy"
Saying that the Fed controls inflation implies that inflation is a natural phenomenon. Nothing could be further from the truth. Inflation is not some natural rise in prices but instead an increase in the supply of money, which in turn gives rise to the general level of prices in the economy ... Incidentally, before 1900, chronic inflation was not a problem in the United States; the purchasing power of a dollar in 1900 was very close to what it was in 1800. Since the Fed's creation, however, the dollar has lost 95 percent of its purchasing power.
Delete the Fed, by
Sheldon Richman, 20 Aug 2013
Asks who should run the Federal Reserve after Bernanke's term expires and argues the Fed is unnecessary to stabilize the economy or to prevent unemployment, but harmful in other ways
The authors support that generalization with details. On inflation: "Far from achieving long-run price stability, [the Fed] has allowed the purchasing power of the U.S. dollar, which was hardly different on the eve of the Fed's creation from what it had been at the time of the dollar's establishment as the official U.S. monetary unit, to fall dramatically" — by 95 percent ... the Fed can't lower rates through monetary inflation beyond the very short run. Why not? Because lenders will respond by raising their rates to avoid being screwed by price inflation – unless the Fed prevents the inflation ...
Don't Believe Those Inflation Numbers, by Mark Brandly,
Mises Daily, 1 Sep 2006
Discusses how the Bureau of Labor Statistics reported inflation rates are unlikely to be a true reflection of the actual increases in prices of goods
Food and energy prices are soaring. Inflation is squeezing consumers and roiling financial markets ... As always, government officials are attempting to underreport the inflation estimates ... [T]he feds also want to conceal the cause of inflation. Federal Reserve policies pump up the money supply creating the inflation ... The Fed is essentially blaming inflation on rising prices. Inflation is the rise in prices. This is like the thief blaming his victim's loss of money on the victim's thinner wallet ... They position themselves as inflation hawks, although they are the cause of the problem.
The Federal War on Gold, Part 1, by
Jacob G. Hornberger,
Freedom Daily, Aug 2006
Discusses some of the clauses in the U.S. constitution regarding coinage and the issuance of paper money by the federal government
[H]istorically, gold has provided the best means by which people could protect themselves against the ravages of a rapidly depreciating currency ... When prices of commodities, goods, and services start rising in response to [a] depreciating ... money, the average person is likely to blame those in the private sector, such as oil companies, speculators, and businessmen, for the woes. Being unaware of economic principles, people will even demand that federal officials impose price controls and excess-profits taxes on the evil offenders, a demand that the authorities are often willing to oblige.
The Federal War on Gold, Part 3, by
Jacob G. Hornberger,
Freedom Daily, Oct 2006
Describes Franklin Roosevelt's 1933 executive order confiscating gold held by U.S. citizens and the congressional act nullifying gold clauses in contracts, its constitutional ramifications and subsequent related history
[Roosevelt and his Congress] also nullified every clause in every contract ... that tied the financial obligation to gold. How did these gold clauses operate? Let's say a corporation issued a 100-year bond for $20, promising to pay 3 percent interest. Any lender would ask himself ... "Why wouldn't this bond be worthless in a hundred years because of inflation?" To ensure that that wouldn't happen, the note would contain a "gold clause" which stipulated that the company had to repay the bond, both principal and interest, in the same standard of gold that existed at the issuance of the note.
Friedman, Milton (1912-2006), by Aaron Steelman,
The Encyclopedia of Libertarianism, 15 Aug 2008
Biographical and bibliographical essay
Inflation, Friedman famously argued, was "always and everywhere a monetary phenomenon." It is not fundamentally caused by unions demanding higher wages for their members, thus increasing labor costs and the prices of goods. Nor is it a product of companies wielding expansive market power and charging monopolistic prices. Instead, it is caused by too much money chasing too few goods. Central banks, Friedman concluded, should focus narrowly on maintaining price stability and adopt rules that would ensure such an outcome.
George W. Bush's Nixonomics, by Gregory Bresiger,
Mises Daily, 22 May 2006
Describes the various fiscal, monetary and economic policies during the Nixon presidency and compares them to those under George W. Bush
[I]f Nixon had to choose between unemployment and inflation to achieve his political goals, he would opt for the latter. "We'll take inflation if necessary, but we can't take unemployment," Nixon said ... Nixon's policies led to later hardships for the vast majority ... These included double-digit inflation, high unemployment, ... skyrocketing payroll taxes over the next two decades and a slow- or no-growth economy in the rest of the 1970s. The word that described the economic condition of this era was stagflation—high inflation rates along with little or no growth and considerable unemployment.
Government Keeps People Poor, by
Sheldon Richman, 28 Jun 2006
Enumerates five ways in which, although politicians claim to care about the poor, government keeps people in poverty
How does government keep people poor? A brief article cannot count all the ways, but we can cover the highlights ... First, ... various taxes ... Second, ... many things that make the cost of living higher ... Third, ... occupational licensing ... Fourth, government has steadily eroded the value of the dollar through control of the monetary system. Because of inflation, money buys less today that it would if the monetary system had it not been in the hands of the state. What required a dime to buy in 1947 requires a dollar today. Who is hurt most by inflation? Poorer people.
Government Money Deserves a "Swift" Abolition, by Nicholas Curott, 5 Oct 2006
Recounts Jonathan Swift's campaign against currency debasemen in 18th century Ireland and decries modern day inflation brought on by government-controlled money
Governments in the 20th century were no longer restrained in how much money they could print, and the age of inflation was ushered in. The damage caused by this inflation is incalculable. Even in America the damage is great. By entering into the economy through the credit market, inflation is responsible for economy-wide business cycles ... Most people are rationally ignorant of the destructiveness of inflation. But if they really understood, they would be outraged ... Thus their passions are an untapped powder keg ready to go off. If only we had a man of Swift's eloquence to light the fuse.
How Gold Was Money—How Gold Could Be Money Again, by
Richard Timberlake,
The Freeman, Apr 1995
Examines U.S. monetary history, as it relates to gold, from the Constitution to the late 20th century, suggesting that rather than lobbying for a return to a gold standard, sound money advocates should insist on Treasury gold being returned to taxpayers
If the privatized gold became fairly widely used as money side-by-side with Federal Reserve fiat money, the price of gold in Federal Reserve dollars would tend to be an instant check on the state of inflation–much more so than it is today. When the market price of gold rose, everyone would know that the Fed was inflating–that the real value of the paper dollar was falling–and would substitute private gold money for Federal Reserve money. The market price of gold, therefore, would be a constant check on too much monetary activism by the [Federal Open Market Committee].
Inflation Deflation Red-flation Blue-flation, by Matthew Beller,
Mises Daily, 24 Jul 2008
Explains what is inflation, what is money, contrasts "bad" vs. "not-bad" inflation and analyzes the Federal Reserve's recent and potential actions
The most commonly used definition of inflation — a general increase in the prices of goods and services — is probably the least descriptive, and it is certainly the most misleading. ... Furthermore, use of this definition also leads to such ridiculous terms as 'food inflation' to describe price increases in a few specific agricultural commodities.
Inflation Is Legalized Robbery, Part 1, by Gregory Bresiger,
Freedom Daily, Dec 2006
Inflation is a tax because only the government creates money. ... You don't see the costs of inflation listed on a pay stub but its fearsome power eats away at your income. It is the sneakiest tax because most Americans don't understand who or what causes it and why. Therefore, I believe, inflation is the greatest, most effective, form of robbery in history.
Inflation Is Legalized Robbery, Part 2, by Gregory Bresiger,
Freedom Daily, Jan 2007
This inflation-can-be-good philosophy appeared at the same time as the post-Great Depression Keynesian encouragement of excessive consumption, especially among lower income groups, as a way of preventing depressions. This is a culture, backed by tax policy, that virtually destroyed thrift in our country and encouraged private debt at the same time that government red ink was hitting record levels.
Inflation Is the Last Thing We Need, by
Sheldon Richman, 31 Oct 2013
Responds to promoters of an inflationary environment by explaining price inflation as a consequence of monetary inflation and examines the effects claimed by inflation advocates
Strictly speaking, inflation is what happens when a government central bank ... increases the supply of money and credit out of thin air. When these increase and the supply of goods does not, prices will generally rise — that is, the value of the dollar will fall — and it will take more money to buy things than previously. That's common sense. If people have more money to spend, not because they produced and sold more goods, but only because the central bank printed it, prices will rise with the rising demand ... a rise in prices is called (price) inflation, but it's actually just the consequence of (monetary) inflation.
The Iraq War Crash, by
Justin Raimondo, 2 Mar 2007
Discusses a 9% drop in the Shanghai Stock Exchange on 27 Feb 2007, which also affected other markets, in the context of the Iraq War and a potential conflict with Iran
There are two ways to finance a war: one is by directly increasing taxes. This is never popular, either with the people or the politicians, and so the latter have hit upon a successful subterfuge: inflation. They simply set the government printing presses to running at high speed, sell more government securities overseas, and impose a "hidden" tax–one that falls disproportionately on those least able to afford it. But then again, don't the downtrodden masses always suffer the most in wartime? Isn't it always the elites ... who dream up the wars, and the hoi polloi who fight them?
Is there a federal deficit?, by
Walter E. Williams, 19 Apr 2006
Discusses, from an economics standpoint, whether there is a budget deficit in the U.S. federal government and what are the effects of the shortfall between federal expenditures and revenue (taxes)
One method to force us to spend less privately is through taxation, but that's not the only way. Another way is to enter the bond market. Government borrowing drives the interest rate to a level that it otherwise wouldn't be without [such] borrowing ... Another way to force us to spend less privately is to inflate the currency. Theoretically, Congress can consume what we produce without enacting a single tax law; they could simply print money. The rising prices, which would curtail our real spending, would act as a tax. Of course, an important side effect of doing so would be economic havoc.
Liberalism, by
F. A. Hayek,
New Studies in Philosophy, Politics, Economics and the History of Ideas, 1978
Chapter 9; originally written in 1973 for the
Enciclopedia del Novicento; covers both the history of both strands of liberalism as well as a systematic description of the "classical" or "evolutionary" type
[T]he endeavours to prolong the prosperity and to secure full employment by means of the expansion of money and credit, in the end created a world‑wide inflationary development to which employment so adjusted itself that inflation could not be discontinued without producing extensive unemployment. Yet a functioning market economy cannot be maintained under accelerating inflation, if for no other reason than because governments will soon feel constrained to combat the effects of inflation by the control of prices and wages. Inflation has always and everywhere led to a directed economy ...
The Life, Death, and Resurrection of an Economy, by Michael C. Monson,
The Freeman, May 1993
Lengthy economic history of Argentina, from the time of the conquistadors to the early 1990's, highlighting the outstanding growth in the 19th and early 20th century and the economic nationalism and government interventions in the 20th century
Perón was a demagogue promising a higher standard of living ... If the people wanted money, he would print it. Money in circulation skyrocketed ... As a result of printing money by the bushelful, inflation was accelerating. Rather than deal with its own profligacy, the government instituted a two-year wage freeze in 1952 ... With the economy grinding to a halt and public opposition mounting, the government was forced to lift the wage freeze in April 1954. Now the underlying inflation that the government had tried to hide through its wage freeze became obvious.
Making Money Disappear, by Richard W. Rahn,
The Washington Times, 22 Nov 2011
Defines money, discusses inflation and the gold standard and suggests that the problems will only go away if governments relinquish their monopolies on money issuance
Inflation occurs when the central bank—the Fed in the United States or the European Central Bank in Europe—creates money at a faster rate than the supply of goods and services increases ... If people hold on to money rather than spend it, inflation will fall and vice versa ... [E]ven though the Fed has been rapidly increasing the money supply, much of it is sitting in banks rather than being used for additional investment or consumption. Even so, the growth in the money supply has been greater than the growth in new goods and services; hence the current inflation.
Milton Friedman (1912-2006), by
Richard M. Ebeling,
Sheldon Richman, 17 Nov 2006
Memorial tribute, highlighting Friedman's role in opposing Keynesianism, and his books and other public activities (a revised version appeared in
The Freeman Dec 2006)
Beginning in the 1950s Friedman presented a restatement of the quantity theory of money, arguing that all prolonged and sustained general rises in prices were caused by an increase in the supply of money. "Inflation," he said, "is always and everywhere a monetary phenomenon." ... This led [him] to make the case for a "monetary rule," under which ... the Federal Reserve would be limited to increasing the supply of money at a fixed annual rate of around 3%. This would create a high degree of predictability about monetary policy and generate a relatively stable price level in a growing economy.
Minimum Wage Rates, by
Ludwig von Mises,
Human Action, 1949
Chapter 30, "Interference With the Structure of Prices", Section 3; discusses the setting of minimun wages both by legislation and by collecitve bargaining, pointing out some of the resulting problems
But if the government finances its spending program by inflation--by an increase in the quantity of money and by credit expansion--it causes a general cash-induced rise in the prices of all commodities and services. If in the course of such an inflation the rise in wage rates sufficiently lags behind the rise in the prices of commodities, institutional unemployment may shrink or disappear altogether. But what makes it shrink or disappear is precisely the fact that such an outcome is tantamount to a drop in real wage rates.
A Mission to Beijing, by Vin Suprynowicz,
Las Vegas Review-Journal, 24 Dec 2006
What Messrs. Paulson and Bernanke have been ... telling ... in effect, is '... we're actually going to print enough paper confetti dollars to increase the world's dollar supply by 10 percent a year. That's 10 percent inflation,' — rising prices are only a sign of inflation, remember, not its cause — 'which means a worker getting a 3 percent raise actually loses 7 percent of his buying power every year ...'
Monetary Central Planning and the State, Part XXVI: Milton Friedman and the Monetary "Rule" for Economic Stability, by
Richard M. Ebeling,
Freedom Daily, Feb 1999
Examines Friedman's arguments, in a 1967 speech to the American Economic Association, about what monetary policy could not accomplish and his defense of a paper money standard in the 1960 book
A Program for Monetary Stability
[I]n the longer run, the increase in the money supply would result in a general rise in prices ... [I]f the monetary expansion were to continue for a long period of time and individuals came to expect a continuing general rise in prices in the future, lenders would begin to tag an "inflation premium" onto the rate of interest ... because of the loss in purchasing power caused by the price inflation during the period of the loan ... Indeed, inflationary expectations of this type could push interest rates far above what they had been before the monetary expansion had begun.
Monetary Central Planning and the State, Part XXV: Milton Friedman and the Demand for Money, by
Richard M. Ebeling,
Freedom Daily, Jan 1999
Describes the role of money according to Keynesians and contrasts it with Friedman's monetary theories in his 1956 essay "The Quantity Theory of Money–A Restatement"
[That] is what led Friedman to argue:
The central fact is that inflation is always and everywhere a monetary phenomenon. Historically, substantial changes in prices have always occurred together with substantial changes in the quantity of money relative to output. I know of no exception to this generalization, no occasion in the United States or elsewhere when prices have risen substantially without a substantial rise in the quantity of money relative to output or when the quantity of money has risen substantially relative to output without a substantial rise in prices.
Money and Gold in the 1920s and 1930s: An Austrian View, by
Joseph T. Salerno,
The Freeman, Oct 1999
Criticizes Richard Timberlake's
The Freeman articles on U.S. monetary policy during 1920-39, contrasting the British Banking School vs. Currency School definitions of inflation
Rothbard's definition of inflation as "the increase in money supply not consisting in, i.e., not covered by, an increase in gold," is an old and venerable one. It was the definition that was forged in the theoretical debate between the hard-money British Currency School and the inflationist British Banking School in the mid-nineteenth century. According to the proto-Austrian Currency School, which triumphed in the debate, the gold standard was not sufficient to prevent the booms and busts ..., which had continued to plague Great Britain despite its restoration of the gold standard in 1821.
Mont Pelerin: 1947-1978: The Road to Libertarianism, by
Ralph Raico,
Libertarian Review, Jan 1979
Reviews the presentations and discussions at the 1978 meeting of the Mont Pelerin Society, with an overview of the Society's history and particularly the 1958 meeting which had similar themes
Jacques Rueff declared: "There can be no liberal revival so long as inflation goes on. Inflation is a far greater threat to liberty throughout the world today than Marxism." And Milton Friedman noted: "A Third world war is the most obvious threat to the preservation of a free society. If this may be optimistically put to one side, the most serious threat is, I believe, inflation. Inflation is a threat less because of its direct effects than because of the measures that are likely to be taken by government to control the inflation and the effects of inflation on the competitive structure of the economy."
The New Deal and Roosevelt's Seizure of Gold: A Legacy of Theft and Inflation, Part 2, by William L. Anderson,
Freedom Daily, Sep 2006
Describes Roosevelt's Executive Order 6102, its threats for non-compliance and its immediate effects, as well as its legacy: Btretton Woods, Nixon's closing of the gold window and current inflation
The small burst of inflation generated by Roosevelt's move did create a bit of an economic boom, as usually occurs in the early stages of inflation ... in order to pay for the vast expansion of government welfare programs associated with Lyndon Johnson’s Great Society and the escalating Vietnam War, the Federal Reserve System aggressively expanded the supply of money, which not only depreciated the currency at home but also flooded the rest of the world with dollars. ... Today, the U.S. monetary system is adrift in inflated dollars.
One Hundred Years of the Federal Reserve, by
Sheldon Richman,
Future of Freedom, Dec 2013
Examines the Federal Reserve's record since its inception, quoting the 2010 Cato Institute paper "Has the Fed Been a Failure?" by Selgin, Lastrapes and White, as well as Rothbard, Timberlake and Hummel
"[Far] from achieving long-run price stability," the authors write, the Fed "has allowed the purchasing power of the U.S. dollar, which was hardly different on the eve of the Fed's creation from what it had been at the time of the dollar's establishment as the official U.S. monetary unit, to fall dramatically." ... From the late 18th century to the second decade of the 20th century, the purchasing power of the dollar was essentially stable ... "[Thereafter] the price soared, reaching $2422 in 2008 ..." In sum, the dollar has lost 95% of its purchasing power since the Fed has been in operation.
The Organization of Debt into Currency: On the Monetary Thought of Charles Holt Carroll, by Robert Blumen, 27 Apr 2006
Review of the fractional reserve banking and monetary arguments made by Charles Holt Carroll, a 19th century Massachusetts merchant, in a collection of 36 essays re-published in 1964 in
Organization of Debt into Currency and Other Papers
A constant problem with the "fictitious money" system is price inflation. Debt, organized into currency influences prices in the same way as would money proper. Rising prices are the result ... Like Cantillon and Mises, Carroll saw that an increase in the supply of money occurs at a specific point in the financial system, and that the effect on prices moves over time as the money is spent by the original recipients, and then spent again by secondary recipients ...
Professor Ludwig von Mises Discusses Free Enterprise,
La Prensa, 2 Jun 1959
Original title: De la Libre Empresa Habló el Profesor Dr. Ludwig von Mises
Translation of article reporting Mises' visit to Buenos Aires; discusses his views on free enterprise, inflation, the policies of De Gaulle and Adenauer and the possibility of an Argentine economic recovery
[Mises] later talked to us about the problem of inflation, saying that "the most unfortunate factor in the current economic structure of western countries is the one constituted by the inflationary policies that in greater or less degree are practiced in all of them, including the United States." He mentioned governments' unbalanced budgets, and "... When taxes are not enough, because taxable sources are exhausted, they embrace the policy of monetary emission without backing collateral, falling into spiraling inflation, a process that—if not tackled—leads to a real maelstrom."
Speaking of Inflation, by Stu Pritchard,
Freedom Daily, Jan 2006
Discusses the common misunderstanding of inflation as rising prices as opposed to the monetary phenomenon
Commentators often mention rising costs nowadays paid first by retailers for their products and services, then by consumers. Apparently, they think that that is inflation. No, they’ve got the cart before the horse. ... For an excellent discussion of what inflation really is and the critical role that government plays in producing it, I’d recommend for everyone’s reading 'Inflation in One Page' and Economics in One Lesson, (especially its chapter 'The Mirage of Inflation'), both by Henry Hazlitt ...
The Ultimate Tax Cut, by
Jacob G. Hornberger,
Freedom Daily, Dec 2007
Explains how tax cuts promised by political candidates are fraudulent, since the government expenditures still have to be paid somehow, either by taxation or through monetary inflation, and asks a fundamental question regarding the role of government
Another way ... that the government finances its excess expenditures is by simply printing the money to pay for expenditures, a practice known as inflation. When the government inflates the currency to pay its excess bills, the result is a lower-valued currency ... The advantage of paying for government expenses through inflation, as compared to income taxation, should be obvious: Most people don't have any idea that this is the way that government is paying its bills. They think that inflation is some sort of mysterious monetary infection that just seems to strike nations randomly and unexpectedly.
Under the Shadow of Inflationomics, by
Hans F. Sennholz, 1 Jun 2006
Explains how inflation has its roots in central banking and fiat money, and describes the influence of Keynesian economics on the policies of U.S. presidents from Richard Nixon to George W. Bush
Inflationomics sprang from the old roots of central banking and fiat money ... It ... commenced visibly in 1971 ... The US dollar has depreciated at various rates ever since, at double-digit rates during the 1970s and early 1980s and at single-digit rates since ... The present dollar is worth some 10 cents of the 1970 dollar and is bound to lose ever more in the future. Moreover, inflation misleads businessmen in their investment decisions, which is the root cause of the business cycle. Indeed, inflation breeds many evils and haunts many Americans who are rather unenlightened about its causes.
The Way of All Cash, Part II, by Bill Bonner,
The Daily Reckoning, 2 Jun 2006
Second and final installment of the history of the Peronist movement in Argentina, covering the period from the late 1980's to the early 2000's, as well as going back to before the 1930's and discussing Perón's terms in office
[Menem] had reduced the inflation rate from 200% per month to just 4% per year, by pegging the peso to the dollar ... Argentina should have followed [the advice to dollarize]. Instead, its own people juiced up the money supply at an average rate of 60% per year between 1991 and 1994. In 1996 and 1997, it went up at 15% and 20% respectively. It didn't take long before prices were rising again and investors were beginning to call their banks in Miami. Even with very strong economic growth (Argentina grew at an 8% rate in the mid-'90s ...), the government still could not balance the budget.
Will An Oil Price Fall Push Inflation Down?, by Frank Shostak,
Mises Daily, 21 Sep 2006
It is a myth that price inflation is somehow led around by the nose by major sectors such as energy and has nothing to do with the money stock. Further, it is not the case that consumers are but passive players in this drama, accepting whatever prices they are given.
