"That artificial decline in the value, or purchasing power, of the currency was obviously not appreciated by the general public. It was a literal wealth transfer that benefited the small sliver of society who got the new money early at the expense of everyone else. So, over time, monetary authorities and their intellectual allies worked to obfuscate the concept."
Ugh. After a decade on ZH I abhor discussions about inflation.
"Today, some economists use the term “monetary inflation” to refer to the old definition. But when inflation is brought up in public discourse, it’s virtually always in reference to price inflation—the general rise in prices.'
The public always thinks of inflation in terms of rising prices. A few understand the difference between price inflation and asset inflation, and even fewer are capable of comprehending the economic distinction that inflation is actually due to an increase in the monetary supply.
". . .our attention should be fixed on the one true culprit: the money printing being carried out and/or enabled by the Federal Reserve."
The Federal Reserve is a private banking cartel that answers only to its member banks. Everything they do in public is performative.
"Because it represents the political class declaring that much of the economic pain they’re causing is irrelevant, specifically so they can justify creating additional, actual inflation."
We live in an era of debauchery, degeneracy, and nihilism. Of course the political class don't GAF about the masses. Yet. The problem with that point of view is eventually the masses realize they are the many and the political class are the few.
🎯 I have always said....if you want an Actual Cause to protest....go to The Marriner S. Eccles Building. That is ground zero for the obliteration of the Middle Class...brought on by their inflating of Money Supply since going off the Gold Standard. ...and to your point, Politician's can't win a Class War so they manufacture cultural Race and Gender wars as the shinny object. -- and we fall for it -- If more folks only knew.
I failed the Asch Conformity Experiment at a young age.
80% of the population will go along to get along.
My conclusion? This will end one way: in blood and tears.
I bought the Fifth Edition of Joel Skousen's book, "Strategic Relocation."
I garden and cook and am armed. I grew up poor so being poor doesn't scare me or bother me at all.
Presently living in Arkansas for a reason in a one-stoplight sun down town. Bored LEOs keep a close eye on everything in town. It's a nice quiet 99% white small town.
Just saw a really nice house come up FSBO today. I'm going to make an offer. Beautiful neighborhood! Probably able to pay half cash and finance the rest with a reno loan.
There is a one-panel cartoon that shows two separate single-maned booths. The sign over the first booth reads -- "Comfortable Lies". The sign over the second booth reads -- "Unpleasant Truths". One of those booths has a very long line, while the other has no line because it's waiting for you and I (and a few others here)...and is the Primary reason I joined this site.
Isnt the money supply increased by banks, more than govt money printing? I dont mean to let our govt off the hook. But any new money printed can be lent out 10 to 1 by banks.
In fact, if banks increase reserves, then money supply can rapidly decrease and this has nothing to do with govt money printing.
Banks play the key role, in tandem with govt debasement.
At least mathematics has the advantage of knowing what number is. Computer science uses number restricted to 0 and 1 — and builds its logic on the foundations of Boolean algebra. Greek Euclidean geometry — the most beautiful branch of math in my biased opinion — posits the imaginary projections of the point, the line and the plane (all epiphenomenon of the point). And then it builds an entire 3D reality just from those and discovers the Pythagorean theorem which is the epicenter — in terms of the thought forms — upon which much of calculus is built and much of 300+ years of physics.
The sad thing about economics, of any school — Keynes, Mises or whoever — is that it has no precision in terms of elemental forms. It pretends it knows what money is but in reality it does not — it now what money does: stores value, acts as a unit of account, provides a medium of exchange. That’s what the text books say. But that is not what money “is”. and so ideas of money are filtered not through the a clear idea of the phenomenon itself but through a ledger of what the phenomenon enables. And there is no recognition that what it enables is only a part of its phenomenological energies.
So any school of economics is built not on a rock — as numerical mathematics or Greek geometry or computer science is — but on a shifting conceptual quick sand upon which all “positive” LOL you economists statements degenerate into “normative” rhetorical flourishes.
I’m sorry but it’s true. I didn’t make it true. I’m just pointing at what it is. It’s like pointing at the stars. You didn’t make them but there they are.
If economics of any school sought some deeper insight into the phenomenon of money they would discover something that may be closer to the point, the line and plane. Or to number. Or to 0 and 1. Will that make you money? Probably not. Will make you friends? Well maybe some cranks.
So it’s hard to take seriously these rhetorical flourishes. These op-Ed’s of political economy. These prescriptions for prosperity if only politicians would kneel at the alter of some long dead writer’s braindumps. They lack any kind of rigor. Is that rigor possible? That’s an interesting question. I suspect the answer is “yeah kind of”. Economics needs a point a line and a plane — or some lucid fundamental library of concept — something conjecturally really solid and intuitively sensible from direct perception. Some of that is group psychology, some is invididual psychology, some is ethics, some is probably evolutionary biology, This won’t happen overnight, but if anybody is serious — it’s there. Write the book! LOL. 200 years from now you’ll have a crowd of angry young men with your image on their T-shirts. Shit. LOL
Thank you for this article as I have been fighting with idiots who don’t understand what inflation is and the original meaning of it is still what inflation is but they have hijacked the word like they do some many others and try to change the meaning so as to confuse the public. Milton Friedman said it best it is the increase in money supply by the government. Supply and demand issues that cause prices to rise are not inflation but so many people believe that and that is why the CPI is a joke. My personal finances say inflation is much higher than they are quoting as prices have gotten ridiculously high and wages have not kept up at all. Sure there has been a rise in wages but it’s nothing to offset how bad inflation is and it is only getting worse with the supply shocks in oil from the Iran conflict that Trump insists making a deal with Iran who has never kept their word on past deals he is hell bent on getting a deal that I know and you know and we all know Iran will never honor the terms of the deal but yet all low and middle class America is being destroyed by the highest energy prices in our lifetime. Trump said he does not care about mid terms or gas prices and he means it and we all suffer because of it. I say this as a Trump support who voted 3 times for him but this 2nd term is no where near as good as his 1st term and he is losing my support with continued tarring threats and these fuel prices that are destroying middle class finances. What happened to MAHA, Crypto regulation, the SAVE act all MAGA points that he has forgot about.
"It’s also worth noting that a general rise in prices is actually impossible without a change in the money supply. Even if a historic supply shock like the covid lockdowns or the closure of the Strait of Hormuz occurs, as long as the money supply remains unchanged, the sharp increase in some prices would cause a fall in prices elsewhere. People would be forced to cut back on less essential things, and demand would fall for so-called complementary goods. That drop in demand would drive some prices down. The only way to raise prices across the entire economy is to manipulate the monetary unit."
It's sad to see our host try to hammer a square peg into a round hole like the above that ignores how the markets actually work.
In reality, if covid checks had gone to Businesses instead of People, you would have seen a rise in profits (or decline in losses) in businesses, which would have increased the ability of the upper leg of the K to consume while the lower leg would have had to cut spending. Resources would have flowed to the upper leg of the economy to capture the flow of funds, while shorting resources for the lower leg, resulting in permanent price increases for the consumer goods, rather than the price decreases our host believes. Sound familiar? it's what we're living right now and the core of why the economy has gone "K-shaped".
Now let's say there were no checks to anybody. In that case, both legs of the economy would have reduced consumption, but the upper leg of the economy would have had larger reserve assets to draw on, so the smaller pool of resources (less cash flow means less investment which means fewer resources developed) would have still flowed to the upper leg of the economy at the expense of the low leg. That would create shortages that would still result in permanent price increases for the lower leg.
The fallacy in host's argument is that it assumes perfectly fungible and efficient markets that operates without constrained resources. That's not the case and it is this very inefficiency that drives arbitrage opportunities and market opportunities that are at the core of capitalism.
The idea that inflation is a purely monetary phenomenon is false. Shortages that are not brief in nature create price increases that are never fully reversed and permanently alter the allocation of resources in response.
What most people do not realize is that gold and silver are not passive stores of value. Instead they are best looked at as potential money. However, gold as money is a very tough love mistress. If you are out of bullion it is tough luck, because no one can ride to your rescue. Hence governments frequently introduced paper money when at war - see the US war of independence and US civil war, for example.
To cut a long story short, gold price is more the probability of becoming money. If we really were to use gold as money (and credit) in every-day payments (and not something else), it's price would probably be around 20 thousand $ per ounce in today's (2026) US dollars. So the current probability of money function is probably around 22%. In 2000, it was around 3%. In 1980 it was probably 40-50%.
It's a bit awkward to say. But an army that doesn't fight doesn't get experience from fighting. The whole concept that led to the League of Nations after WW1 and United Nations after WW2 has not worked out. So now we are back to conventional wars with the drone update.
Ahhh, I was waiting for a Mackinderist to to show up. We should attack Russia now while Ukraine has them against the ropes, right? How long are you going to bankroll the Rothschilds?
Actually, my post was about the US compared to say Russia or Israel. Anyway, McKinder would counsel against attacking Russia in the first place, since that country has friendly relations with China and India. As well as historically fairly good relations with Israel. After all, it was UN ambassador Gromyko acting on instructions from Stalin who broke the tie at establishing Israel in 1947.
"That artificial decline in the value, or purchasing power, of the currency was obviously not appreciated by the general public. It was a literal wealth transfer that benefited the small sliver of society who got the new money early at the expense of everyone else. So, over time, monetary authorities and their intellectual allies worked to obfuscate the concept."
Ugh. After a decade on ZH I abhor discussions about inflation.
"Today, some economists use the term “monetary inflation” to refer to the old definition. But when inflation is brought up in public discourse, it’s virtually always in reference to price inflation—the general rise in prices.'
The public always thinks of inflation in terms of rising prices. A few understand the difference between price inflation and asset inflation, and even fewer are capable of comprehending the economic distinction that inflation is actually due to an increase in the monetary supply.
". . .our attention should be fixed on the one true culprit: the money printing being carried out and/or enabled by the Federal Reserve."
The Federal Reserve is a private banking cartel that answers only to its member banks. Everything they do in public is performative.
"Because it represents the political class declaring that much of the economic pain they’re causing is irrelevant, specifically so they can justify creating additional, actual inflation."
We live in an era of debauchery, degeneracy, and nihilism. Of course the political class don't GAF about the masses. Yet. The problem with that point of view is eventually the masses realize they are the many and the political class are the few.
🎯 I have always said....if you want an Actual Cause to protest....go to The Marriner S. Eccles Building. That is ground zero for the obliteration of the Middle Class...brought on by their inflating of Money Supply since going off the Gold Standard. ...and to your point, Politician's can't win a Class War so they manufacture cultural Race and Gender wars as the shinny object. -- and we fall for it -- If more folks only knew.
I failed the Asch Conformity Experiment at a young age.
80% of the population will go along to get along.
My conclusion? This will end one way: in blood and tears.
I bought the Fifth Edition of Joel Skousen's book, "Strategic Relocation."
I garden and cook and am armed. I grew up poor so being poor doesn't scare me or bother me at all.
Presently living in Arkansas for a reason in a one-stoplight sun down town. Bored LEOs keep a close eye on everything in town. It's a nice quiet 99% white small town.
Just saw a really nice house come up FSBO today. I'm going to make an offer. Beautiful neighborhood! Probably able to pay half cash and finance the rest with a reno loan.
There is a one-panel cartoon that shows two separate single-maned booths. The sign over the first booth reads -- "Comfortable Lies". The sign over the second booth reads -- "Unpleasant Truths". One of those booths has a very long line, while the other has no line because it's waiting for you and I (and a few others here)...and is the Primary reason I joined this site.
My BA is in philosophy. I went on a truth kick while I was a student.
Everyone hated me.
I still tell the truth. Obviously I'm not Miss Popular.
I suspect I'm not doing myself many favors here, either. But that's not because I'm trying.
Isnt the money supply increased by banks, more than govt money printing? I dont mean to let our govt off the hook. But any new money printed can be lent out 10 to 1 by banks.
In fact, if banks increase reserves, then money supply can rapidly decrease and this has nothing to do with govt money printing.
Banks play the key role, in tandem with govt debasement.
Nope - paper money is specifically made to be able to be lent out 10:1.
Gold is different. You can't lend gold out at 10:1. You are lucky if you lend it out at 3:1 with gold certificates and don't screw up.
At least mathematics has the advantage of knowing what number is. Computer science uses number restricted to 0 and 1 — and builds its logic on the foundations of Boolean algebra. Greek Euclidean geometry — the most beautiful branch of math in my biased opinion — posits the imaginary projections of the point, the line and the plane (all epiphenomenon of the point). And then it builds an entire 3D reality just from those and discovers the Pythagorean theorem which is the epicenter — in terms of the thought forms — upon which much of calculus is built and much of 300+ years of physics.
The sad thing about economics, of any school — Keynes, Mises or whoever — is that it has no precision in terms of elemental forms. It pretends it knows what money is but in reality it does not — it now what money does: stores value, acts as a unit of account, provides a medium of exchange. That’s what the text books say. But that is not what money “is”. and so ideas of money are filtered not through the a clear idea of the phenomenon itself but through a ledger of what the phenomenon enables. And there is no recognition that what it enables is only a part of its phenomenological energies.
So any school of economics is built not on a rock — as numerical mathematics or Greek geometry or computer science is — but on a shifting conceptual quick sand upon which all “positive” LOL you economists statements degenerate into “normative” rhetorical flourishes.
I’m sorry but it’s true. I didn’t make it true. I’m just pointing at what it is. It’s like pointing at the stars. You didn’t make them but there they are.
If economics of any school sought some deeper insight into the phenomenon of money they would discover something that may be closer to the point, the line and plane. Or to number. Or to 0 and 1. Will that make you money? Probably not. Will make you friends? Well maybe some cranks.
So it’s hard to take seriously these rhetorical flourishes. These op-Ed’s of political economy. These prescriptions for prosperity if only politicians would kneel at the alter of some long dead writer’s braindumps. They lack any kind of rigor. Is that rigor possible? That’s an interesting question. I suspect the answer is “yeah kind of”. Economics needs a point a line and a plane — or some lucid fundamental library of concept — something conjecturally really solid and intuitively sensible from direct perception. Some of that is group psychology, some is invididual psychology, some is ethics, some is probably evolutionary biology, This won’t happen overnight, but if anybody is serious — it’s there. Write the book! LOL. 200 years from now you’ll have a crowd of angry young men with your image on their T-shirts. Shit. LOL
Thank you for this article as I have been fighting with idiots who don’t understand what inflation is and the original meaning of it is still what inflation is but they have hijacked the word like they do some many others and try to change the meaning so as to confuse the public. Milton Friedman said it best it is the increase in money supply by the government. Supply and demand issues that cause prices to rise are not inflation but so many people believe that and that is why the CPI is a joke. My personal finances say inflation is much higher than they are quoting as prices have gotten ridiculously high and wages have not kept up at all. Sure there has been a rise in wages but it’s nothing to offset how bad inflation is and it is only getting worse with the supply shocks in oil from the Iran conflict that Trump insists making a deal with Iran who has never kept their word on past deals he is hell bent on getting a deal that I know and you know and we all know Iran will never honor the terms of the deal but yet all low and middle class America is being destroyed by the highest energy prices in our lifetime. Trump said he does not care about mid terms or gas prices and he means it and we all suffer because of it. I say this as a Trump support who voted 3 times for him but this 2nd term is no where near as good as his 1st term and he is losing my support with continued tarring threats and these fuel prices that are destroying middle class finances. What happened to MAHA, Crypto regulation, the SAVE act all MAGA points that he has forgot about.
"It’s also worth noting that a general rise in prices is actually impossible without a change in the money supply. Even if a historic supply shock like the covid lockdowns or the closure of the Strait of Hormuz occurs, as long as the money supply remains unchanged, the sharp increase in some prices would cause a fall in prices elsewhere. People would be forced to cut back on less essential things, and demand would fall for so-called complementary goods. That drop in demand would drive some prices down. The only way to raise prices across the entire economy is to manipulate the monetary unit."
It's sad to see our host try to hammer a square peg into a round hole like the above that ignores how the markets actually work.
In reality, if covid checks had gone to Businesses instead of People, you would have seen a rise in profits (or decline in losses) in businesses, which would have increased the ability of the upper leg of the K to consume while the lower leg would have had to cut spending. Resources would have flowed to the upper leg of the economy to capture the flow of funds, while shorting resources for the lower leg, resulting in permanent price increases for the consumer goods, rather than the price decreases our host believes. Sound familiar? it's what we're living right now and the core of why the economy has gone "K-shaped".
Now let's say there were no checks to anybody. In that case, both legs of the economy would have reduced consumption, but the upper leg of the economy would have had larger reserve assets to draw on, so the smaller pool of resources (less cash flow means less investment which means fewer resources developed) would have still flowed to the upper leg of the economy at the expense of the low leg. That would create shortages that would still result in permanent price increases for the lower leg.
The fallacy in host's argument is that it assumes perfectly fungible and efficient markets that operates without constrained resources. That's not the case and it is this very inefficiency that drives arbitrage opportunities and market opportunities that are at the core of capitalism.
The idea that inflation is a purely monetary phenomenon is false. Shortages that are not brief in nature create price increases that are never fully reversed and permanently alter the allocation of resources in response.
Been hearing the same refrain for decades. In all that time, it has never helped anyone make money in the markets.
Austrians gotta Austrian...
It did if you started averaging into gold and silver in 2001!
What most people do not realize is that gold and silver are not passive stores of value. Instead they are best looked at as potential money. However, gold as money is a very tough love mistress. If you are out of bullion it is tough luck, because no one can ride to your rescue. Hence governments frequently introduced paper money when at war - see the US war of independence and US civil war, for example.
To cut a long story short, gold price is more the probability of becoming money. If we really were to use gold as money (and credit) in every-day payments (and not something else), it's price would probably be around 20 thousand $ per ounce in today's (2026) US dollars. So the current probability of money function is probably around 22%. In 2000, it was around 3%. In 1980 it was probably 40-50%.
No worries, war is good for the economy. I also don't know how I'd spend my day without my daily dose of warporn.
Apparently you don't have a child in the Service.....it's not a Video Game.
It's a bit awkward to say. But an army that doesn't fight doesn't get experience from fighting. The whole concept that led to the League of Nations after WW1 and United Nations after WW2 has not worked out. So now we are back to conventional wars with the drone update.
Ahhh, I was waiting for a Mackinderist to to show up. We should attack Russia now while Ukraine has them against the ropes, right? How long are you going to bankroll the Rothschilds?
Actually, my post was about the US compared to say Russia or Israel. Anyway, McKinder would counsel against attacking Russia in the first place, since that country has friendly relations with China and India. As well as historically fairly good relations with Israel. After all, it was UN ambassador Gromyko acting on instructions from Stalin who broke the tie at establishing Israel in 1947.
You are totally not understanding the reason for all these wars which is why they continue. War on! Prepare your children.
Come on, Stalin didn't understand that establishing Israel would lead to war, potentially winning with Soviet help? Give me a rest!