▶ What Is Inflation? | Price Inflation Versus Printing Money Inflation
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▶ What Is Inflation? | Price Inflation Versus Printing Money Inflation

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What Is Inflation|Price Inflation Versus Printing Money Inflation ...

What Is Inflation|Price Inflation Versus Printing Money Inflation

According to Wikipedia http://en.wikipedia.org/wiki/Inflation, "inflation" has this definition:

"In economics, inflation is a persistent increase in the general price level of goods and services in an economy over a period of time."

We will call this definition, "price inflation."

It is, to be sure, what the vast majority (the bottom 99.9999% of us) feel the greatest economic impact from

and is generally what most people mean when they use the term, "inflation," as it results in us spending more and more of our money on less and less goods and services.

Price inflation robs us of the wealth that we create and results in a lower quality of life for everybody because it diminishes our ability to freely participate in commerce with each other.

Then on same Wikipedia page, the following is also said about inflation:

"Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply."

“Excessive growth of the money supply,” is generally what economists are referring to when they use the term inflation.

Since it is all too common to apply these two concepts interchangeably, and confusingly, to the term, "inflation," we will make a distinction between the two concepts here.

As noted earlier, an increase in prices will be referred to here as, "price inflation."

"Excessive growth of the money supply," will be referred to here as, "circulatory inflation."

The mantra that many economists, particularly the so-called Austrian School, have been repeating is that price inflation is the direct result of circulatory inflation, or by the government "printing too much money."

WROOONG!

It sounds good on paper, right?

In theory, circulatory inflation *could* cause price inflation.

In some parallel universe.

If circulatory inflation existed there.





First of all, the government does NOT print money.

With the exception of minted coins, all of our currency is issued by privately held banks at INTEREST.

Since all of these privately published representations (which we call currency) have to be paid back to private banks at interest which they never issue in the first place, it is mathematically impossible for circulatory inflation to exist.

Second of all, are we to believe that manufacturers and other business owners possess some magical telepathic power to detect when the the supply of currency has been expanded and then automatically raise their prices to compensate?

Is that why prices have been increasing as much as 10% annually?

WROONG!

Since we have been obligated to pay back these representations of entitlement

with interest which is never issued, the inevitable result is, in fact, circulatory DEFLATION.

In other words, paying interest on every single unit of currency in circulation causes a DECREASE in the volume of currency.

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    ▶ What Is Inflation? | Price Inflation Versus Printing Money Inflation ▶ What Is Inflation? | Price Inflation Versus Printing Money Inflation Presentation Transcript

    • What Is Inflation? Price Inflation Versus Printing Money Inflation
    • Price Inflation According to Wikipedia http://en.wikipedia.org/wiki/Inflation, "inflation" has this definition: "In economics, inflation is a persistent increase in the general price level of goods and services in an economy over a period of time."
    • Price Inflation We will call this definition, "price inflation." It is, to be sure, what the vast majority (the bottom 99.9999% of us) feel the greatest economic impact from
    • Price Inflation and is generally what most people mean when they use the term, "inflation," as it results in us spending more and more of our money on less and less goods and services.
    • Price Inflation Price inflation robs us of the wealth that we create and results in a lower quality of life for everybody because it diminishes our ability to freely participate in commerce with each other.
    • “Printing Money” Then on the same Wikipedia page, the following is also said about inflation: "Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply."
    • “Printing Money” “Excessive growth of the money supply,” is generally what economists are referring to when they use the term inflation.
    • The Distinction Since it is all too common to apply these two concepts interchangeably, and confusingly, to the term, "inflation," we will make a distinction between the two concepts here.
    • The Distinction As noted earlier, an increase in prices will be referred to here as, "price inflation." "Excessive growth of the money supply," will be referred to here as, "circulatory inflation."
    • Austrian School Debunked The mantra that many economists, particularly the so-called Austrian School, have been repeating is that price inflation is the direct result of circulatory inflation, or by the government "printing too much money."
    • Austrian School Debunked It sounds good on paper, right?
    • Austrian School Debunked In theory, circulatory inflation *could* cause price inflation.
    • Austrian School Debunked In some parallel universe.
    • Austrian School Debunked If circulatory inflation existed there.
    • Austrian School Debunked First of all, the government does NOT print money.
    • Austrian School Debunked With the exception of minted coins, all of our currency is issued by privately held banks at INTEREST.
    • Currency Issuance Since all of these privately-published representations (which we call currency) have to be paid back to private banks at interest, which is paid along with the principal out of circulation, it is mathematically impossible for circulatory inflation to exist.
    • Businesses As Psychics Second of all, are we to believe that manufacturers and other business owners possess some magical telepathic power to detect when the the supply of currency has been expanded and then automatically raise their prices to compensate?
    • Businesses As Psychics Is that why prices have been increasing as much as 10% annually?
    • It's Math! Since we have been obligated to pay back these representations of entitlement with interest out of circulation, the inevitable result is, in fact, circulatory DEFLATION.
    • It's Math! In other words, paying interest on every single unit of currency in circulation causes a DECREASE in the volume of currency.
    • It's Math! According to http://australia4mpe.wordpress.com: "...circulatory inflation or even hyperinflation is indeed a mathematical impossibility under any interest based monetary system."
    • So Why Do Prices Go Up? So, under the current monetary system, if circulatory inflation is mathematically impossible, then what does cause price inflation?
    • So Why Do Prices Go Up? One Word:
    • So Why Do Prices Go Up? *Interest*
    • So Why Do Prices Go Up? Since interest is embedded into every single business transaction in the economy, it is, by and large, the leading driver of increasing prices.
    • Presidential Ironies In a 2012 debate with Mitt Romney, President Obama said: “It's Math. It's Arithmetic.”
    • Presidential Ironies Barack Obama's 2008 campaign returned a package *unopened* containing mathematical proof that the current interest-based system will result in monetary failure, knowing FULLY what the package contained and knowing who it's sender was.
    • Presidential Ironies But that is a topic for yet another video.
    • What Is Inflation? And some of you say, "Well, inflation is just fact of life."
    • What Is Inflation? Visit: People for Mathematically Perfected Economy Facebook Page And Ask Questions! https://www.facebook.com/groups/pfmpe2012/
    • What Is Inflation? And some of you say, "Well, inflation is just fact of life."
    • Thanks For Watching! Please Like Favorite Subscribe And By Golly... SHARE!