Everyone knows that inflation hurts consumers by raising the cost of their purchases and that it hurts those on fixed incomes the most because although their costs are rising, their income isn't. In addition to impoverishing individuals, inflation has several less obvious ramifications. Perhaps the most insidious and detrimental consequence of inflation is the facilitation of more wars. How Inflation Promotes War Prior to the advent of fiat currencies, if a Monarch wanted to wage war, he had to figure out a way to pay for it. If his treasury wasn't large enough to pay for the means of war, the king would have to either raise taxes, or borrow the money, either way there were limits to how … [Read more...]
Why Inflation is Theft
By Dr. Ron Paul When I talk to many teenagers and grade schoolers, they seem to have no problem comprehending the fact that if you just create a lot of money, it'll be like Monopoly money and it won't have value. Governments do that for all kinds of reasons, especially to enhance political power to fight wars we shouldn't be fighting or to pass welfare programs that aren't deserved. When you print that money, the value of that dollar has to go down, and then one of the consequences of inflating the money will be higher prices. But there are a lot of other problems, too, with inflating. It causes a business cycle, it causes financial bubbles and it causes a lot of … [Read more...]