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ACCT
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INFLATION
Who causes inflation? “Government and the government alone is responsible for any rapid increase in the quantity of money…Businessmen do not cause inflation (Friedman).”
Why is inflation called a monetary phenomenon? “Inflation occurs when the quantity of money rises appreciably more rapidly than output, and the more rapid the rise in the quantity of money per unit of output, the greater the rate of inflation (Friedman).”
Who pays for inflation? All holders of money pay for inflation.
Explain how inflation is paid. “The extra money printed is equivalent to a tax on money balances. If the extra money raises prices by 1 percent, then every holder of money has in effect paid a tax equal to 1 percent of his money holdings (Friedman).”
Is inflation serious? Inflation is a serious disease that can destroy a society. “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose (Keynes).”
We have yet to pay the full financial price for the economic policies of the economist Keynes and the socialist policies of FDR and the Democrat Party. My guess is that we may not have long to wait. Global hyperinflation is just around the corner. Inflation is headed to double digits. Enjoy your government monopoly money while you can. The value of the dollar is evaporating.
Who causes inflation? “Government and the government alone is responsible for any rapid increase in the quantity of money…Businessmen do not cause inflation (Friedman).”
Why is inflation called a monetary phenomenon? “Inflation occurs when the quantity of money rises appreciably more rapidly than output, and the more rapid the rise in the quantity of money per unit of output, the greater the rate of inflation (Friedman).”
Who pays for inflation? All holders of money pay for inflation.
Explain how inflation is paid. “The extra money printed is equivalent to a tax on money balances. If the extra money raises prices by 1 percent, then every holder of money has in effect paid a tax equal to 1 percent of his money holdings (Friedman).”
Is inflation serious? Inflation is a serious disease that can destroy a society. “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose (Keynes).”
We have yet to pay the full financial price for the economic policies of the economist Keynes and the socialist policies of FDR and the Democrat Party. My guess is that we may not have long to wait. Global hyperinflation is just around the corner. Inflation is headed to double digits. Enjoy your government monopoly money while you can. The value of the dollar is evaporating.