(also listen to The Prostitution Of Gold)
Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!
Inflation
High Prices Are NOT Inflation
The emphasis on “NOT” in the title of this article is critical to a better understanding of what inflation is – and isn’t. We hear all the time: “Inflation rose sharply last month as consumer prices increased by .6%”, or something similar.
We also hear that higher prices themselves are a cause of inflation. Example…
End To Inflation – Three Possibilities
END OF INFLATION IS INEVITABLE
At first, the statement above may seem counterintuitive; especially in light of the ongoing increase in the cost of goods and services experienced recently that seem to have no limit.
Besides, inflation never stops. All governments, with the help of central banks, intentionally inflate and destroy their own currencies. There are changes in momentum, of course, but an ever-expanding supply of money and credit leads to continual loss in purchasing power of the currency (i.e., U.S. dollar).
Gold, Inflation And The Federal Reserve
GOLD, INFLATION, AND THE FEDERAL RESERVE
Below are my comments and answers to various questions about gold, inflation, and the Federal Reserve. They are “for the record” so to speak, and are meant to be taken literally and specifically…
Consumer Price Inflation
CONSUMER PRICE INFLATION
We hear the term used often, and I’m reasonably certain that most of those who use it think they understand it; but, is the term itself a correct expression for what is meant?
If Inflation Is So Bad, How Come It’s Not Worse?
IF INFLATION IS SO BAD…
Recent headlines have many people despairing over inflation.
A couple of recent examples such as “Inflation Is The Worst It’s Been In Forty Years” and “Consumer Prices Are Rising Rapidly” were followed by “High Inflation Is Here To Stay”.
Just how bad is it? Let’s take a look.
Simple Facts About Inflation
SIMPLE FACTS ABOUT INFLATION
When most people talk about inflation, they are usually referring to the higher prices they pay for goods and services. That is not inflation.
Most of what passes for explanations of inflation and its causes are convoluted and confusing. It is like looking into a pond of muddy water and trying to ascertain what lurks blow the surface.
Below are some facts about inflation that should help clarify things:
Effect of Deflation On The Gold Price
The higher price for gold over time reflects the loss in purchasing power of the US dollar. The loss in the dollar’s purchasing power is an effect of inflation.
Over the past century, the US dollar has lost approximately ninety-nine percent of its purchasing power. The loss in purchasing power is reflected in a gold price that has increased one-hundred fold ($20.67 oz. x 100 = $2067 oz).
The effect of deflation on the gold price is different. To be more accurate, the effect of deflation on gold’s price is opposite to the effect resulting from inflation.
Even Gold Is Subject To Inflation
Yes, even gold is subject to inflation.
Most gold bugs think that a gold standard will solve our inflation problems. While it is true that gold acts as a restraint on governments and central banks desire to create and control money, it does not mean that inflation cannot happen just because gold is the money used.
Inflation Or Deflation – End Result Is Still Depression
INFLATION OR DEFLATION
The debate continues but not much has been said that clarifies the issue for ordinary investors. What follows in this article should help.
Inflation is the debasement of money by government and central banks. The Federal Reserve and all central banks practice inflation by expanding the supply of money and credit continuously and intentionally.
This debasement of the money results in effects that are harmful and unpredictable. One of these effects of inflation is an unquantifiable loss of purchasing power in the money itself.