Inflation, monetary inflation specifically, is as wanted and needed by the state as food is essential for human nourishment. Inflation, more so than taxation, is the primary nourishment that allows the state to, gradually but certainly, turn into a large and far-reaching administrative device that steps in throughout practically all elements of social and economic affairs.
Without inflation, the state finds itself shackled within the boundaries of what it can seize through taxes. A restricted and noninterventionist federal government is, as sound economics shows and history proves, crucial for liberty, success and peace.
However due to the fact that the state is the inherently violent and coercive, holding the power to legislate and enforce legislation, it is therefore inevitable that the government will, through political hoax and financial lies, weaken a sound cash system in favor of the inflation facilitating fiat money system. This is why the state’s most preferred financial system is one based on fiat currency safeguarded from competitors by legal tender laws rather than sound money by financial liberty.
This is likewise why, from the state and statist economics (e.g., Keynesian economics) perspective, the meaning of inflation had to be deliberately distorted– to assist in financial inflation and currency debasement. Which feeds the state with the nutrients it needs to grow bigger in size, scope and reach in detriment to fact, justice and liberty.
Definition of inflation
The popular and textbook definition of inflation is a generalized rise in the rates of goods and services. Typically measured by the Customer Cost Index (CPI). This meaning is not wrong per se however it is inaccurate and grossly deceptive, and intentionally so.
The original and accurate definition of inflation is the artificial increase in the supply of money (and credit). By synthetic it is suggested that the expansion of the supply of money is not determined by the market however rather by a company that oversees the centralized and monopolized financial system– typically a reserve bank.
In today’s inflation-based statist financial system of fiat money, which has existed considering that 1971 when the last link in between the dollar and gold was cut, it is thus hassle-free and essential for the government to promote a distorted and misleading meaning of inflation.
This distortion is not coincidental. This is deliberate. Provided the inherently inflationary and absolutely immoral fiat money standard we (mankind) live under for 50 years now.
Intentional distortion
Inflation has actually been deliberately distorted for two principal reasons. First, the federal government and its monetary company– the reserve bank– shield themselves from any future blame for the continued increase in prices and the currency loss of buying power that inevitably occurs as a result of monetary inflation. This enables the federal government and its working together media outlets to divert the blame to something else, with the typical suspects, or scapegoats, being “greedy business owners” or “corporations.”
Second, and more tragically, the authorities and distorted definition of inflation– a generalized increase in costs of products and services– hides the fact, thus preventing the public from knowing that inflation and the currency’s loss of purchasing power is a deliberate policy of government/central bank the whole time. And if you don’t know the genuine reason for an issue, you will not have the ability to definitively solve it.
When inflation bites too hard and impoverishes the lots of (among lots of other harmful effects to society), government/central bank authorities will not need to admit they create the inflation crisis. For example, this report claims that most Americans believe that “business greed, profiteering and rate gouging” is the cause of the current inflation crisis in America where cost inflation hit a 40 year record high.
What’s more upsetting is the very same report found that the majority of those polled also think that the government must step in and fix the problem. To put it simply, the people want the cause of the issue to deal with the problem. How awful.
Such is the depth of the sea of economic misinformation and miseducation in which the public is drowned. Perhaps, if the public knew that because the establishment of the present United States reserve bank in 1913, the dollar lost more than 95 percent of its acquiring power relative to gold, they would not blame the inflation crisis on “business greed.”
The federal government’s monetary agency and the current fiat cash system are the cause for today’s increasingly inflationary and chaotic monetary scenario. Not corporate greed, speculators, free-market commercialism, Vladimir Putin, or the weather.
When you have a fiat cash system, which implies reserve banks can easily, synthetically and systematically increase the cash supply, practically like a magic technique, inflation (mild or severe) becomes the standard. And this inflationary process gradually destroys the buying power of the currency resulting in greater rates.
Economic Expert Hans F. Sennholz composed:
It is not cash, as is often said, however the devaluation of money– the vicious and crafty destruction of money– that is the root of lots of evils. For it ruins specific thrift and self-reliance as it slowly erodes individual savings. It benefits debtors at the cost of lenders as it quietly moves wealth and income from the latter to the former. It produces the business cycles, the stop-and-go boom-and-bust movements of service that inflict enormous damage on millions of people.
Teacher Sennholz further kept in mind:
Monetary destruction types not only hardship and chaos, but likewise federal government tyranny. Couple of policies are more calculated to destroy the existing basis of a totally free society than the debauching of its currency. And few tools, if any, are more important to the champ of liberty than a sound financial system.
Conclusion
In closing, a generalized rise in the prices of goods and services, is a consequence of inflation, not inflation itself. That’s how it was classically (pre-Keynesian economics) defined.
It makes good sense to use the terms monetary inflation to specify the synthetic increase of the cash supply, on one hand, and utilize rate inflation to describe a generalized rise in the rates of goods and services on the other hand.
In any case, inflation slowly, stealthily however undoubtedly distorts the economy, takes the people’s purchasing power and impoverishes society while benefiting the ruling elites. So, its definition was intentionally distorted to deceive the public and much better serve secret federal government interests.
History (and good sense actually) makes it clear that fiat cash systems are unsustainable plans that always and undoubtedly fail. As such, I question today’s international fiat money system led by the US dollar will defy Natural economic laws to stand the test of time.
Fortunately is when the worldwide fiat dollar standard crumbles (by (active)inflation or by interest rate hike? Possibly a mix of both?), deep-seated economic fallacies and misunderstandings that have actually emerged around it over the last decades, will collapse in addition to it.