Six Things To Consider About Inflation

As an economic term, “inflation” is shorthand for “inflation of the money supply.” The general public, however, usually takes it to mean “rising prices” which is not surprising since one of the common effects of an increase in the money supply is higher prices. However, supporters of government policy often say, “If quantitative easing (QE) and its terrible twin, fractional reserve banking, are so awful, why have we got no inflation?” Inflation To address this conundrum, there are six related factors that are noteworthy: Number One: we need to be clear about the terms we are using. Instead of talking about…