A great lesson on inflation from Frank Shostak appears on mises.org, including this quote from Ludwig von Mises:

Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term “inflation” to refer to the phenomenon that is an inevitable consequence of inflation, that is, the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. …

As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation.

The point is that our monetary system is designed to produce inflation by encouraging bank lending and, when money creation through that mechanism falters, “Quantitative Easing” takes over. A better term would for all this would be be “robbery”.

Read the rest of the article here:  Inflation Is Here, and It Is Going to Get Worse – Frank Shostak – Mises Daily.

You may also enjoy The Crime Known as Quantitative Easing and the Violation of Mr Smith at The Cobden Centre.

Fortunately, these ideas are taking off. See for example the Adam Smith Institute’s What is inflation?

One Comment

  1. What about “devaluation”?