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Old 03-09-2005, 07:35 PM
marypopinz marypopinz is offline
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Join Date: Nov 2004
Posts: 710

Grass is just another shade of shit brown

And now for inflation

Not satisfied with seignorage, and thinking it a good wheeze anyway, governments eventually caught on to the advantage of producing even more paper over and above that 'needed' [12] for trade. Once more, government gets goods for virtually nothing in exchange for the extra money that it prints. This surplus money has all the various advantages for the government delineated elsewhere and a very great deal of disadvantage for the average member of the population. But then, whoever suggested government was your honest friend?

There is another prime manner in which inflation can occur. This is when an economy shrinks, for then there are less goods while the amount of money remains the same. Strangely, a great many commentators confuse a growing economy as inflationary and a contracting economy as deflationary, such is the innumeracy abroad in the land. The confusion seems to be that as an economy expands, so labour becomes in short supply; thus the price of labour increases and this rising price becomes confused with inflation.

Any rising price in one part of the economy will always be matched with falling prices elsewhere in the economy, as long as both the supply of money and the propensity to trade remain stable (see also velocity of money). Inflation, on the other hand, is due almost always to the government printing worthless money in order to cheat you out of your property. Inflation results in a general rise in prices, not a rise in prices for a good that is currently in short supply. Naturally the government does everything it can in order to confuse the two situations, constantly lying and pretending that rising wages or some such is 'causing' inflation. Most are taken in by this, after all government also widely controls the universities and has a cosy relationship with the media and banking combines.
[size=medium]Freelance brain owner[/size] R U Darwin\'s monkey?[size=medium] HumanKIND = God\'s creation[/size]
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