Inflation Is Policy, Not Destiny

Inflation is a conscious policy of the monetary authorities.  It is not an accident, a weather pattern, a mysterious metaphysical malady, or a harmonic convergence of the planets.

It is the result of policy choice.

Why aren’t people clear about that?  Because academic economists and sloppy journalists have confused the issue.  Look, if there is a freeze in Florida and the price of oranges goes up, that is simply a price increase.  People who spend more on oranges will have less to spend on other things. It does not increase the general price level across the economy.

Yet academic economists and sloppy journalists call rising prices inflation.  But inflation has long been understood – and older schools of economics were clear – that inflation is an increase of the supply of money and credit.  The money supply is increased or inflated.

The modern mushy confusion allows the people and institutions that create inflation to escape like a thief in the night from accountability for what they have done.  

So they keep doing it.

It is essential to understand that in addition to economic consequences, inflation subverts the entire culture.

Inflation changes people’s time horizons and their willingness to provide for posterity.  Most healthy people want to leave their children a better world.  Because the money has only diminishing value, it disincentivizes savings. One downstream effect is the American people now leave their own children and grandchildren bearing a massive debt load for spending that was not their own.  If that seems perverse, it is because it is.

Inflation rewards people for preying on the less well-informed.  The sophisticated enter into agreements with no intention of meeting their obligations in real and lasting terms. The biggest debtors in society even lobby for more inflation to devalue their debt.   It was almost a cliché in the high-inflation 1970s to watch old ladies who didn’t know better making long-term deposits at their local savings and loan that paid them a return well below the rate at which the purchasing power of their money was being destroyed.  The sharp prey upon the innocent as honest and lasting value is subverted by government policy.

Inflation drives crime higher and higher.  From CBS News:

Thirty percent of Americans say they’ve shoplifted this year, up from 24% in 2024, with many citing financial strain tied to inflation, according to new research from financial site LendingTree.

About 90% of those who admitted to shoplifting cited affordability concerns and the broader economy as among the drivers of their thefts, according to the LendingTree study, which surveyed 2,000 people in early June.

Inflation has accelerated this year, largely because the Iran war has sent oil and gasoline prices sharply higher. LendingTree said respondents who reported stealing were often taking necessities rather than discretionary items.

We wish we could tell you that America’s destructive policies will be reined in, but we cannot.  Inflation is existential.  America’s debt can only be paid by inflation.  It has come down to this:  Inflate or die!

You can protect yourself monetarily by owning gold and silver.  Doing so is imperative when the social fabric is being shredded as it is today.