Inflation is one thing: increasing the supply of government-issued currency (aka fiat debt instruments) in an economy. Most of what’s called inflation is only an effect of inflation. From Michael Maharrey at schiffgold.com:
Inflation is running rampant. At first, the powers that be tried to convince us it wasn’t a problem because it was just a temporary phenomenon caused by coronavirus. (As if a virus could cause the money supply to increase.) But now, the transitory inflation narrative is dead. Jerome Powell recently admitted that it’s time to “retire” that word. The new strategy seems to be to try to convince you that rising prices are “good for you” and the broader economy. You can decide for yourself the veracity of that argument.
The truth is the federal government needs inflation. It depends on Federal Reserve money printing to support its borrow and spend budgeting strategy. Without the Fed’s inflationary activity, the government couldn’t finance its out-of-control spending habit. But politicians don’t want you to know that they are levying an inflation tax on you, so they perpetuate all kinds of myths about inflation to try to make you feel better about it.
Following are five inflation myths heard in the mainstream media of late. I owe a hat-tip to Thomas Anderson. He compiled most of these myths and published them in the Facebook group Passant Gardant.
Myth 1 – Inflation Is Simply Rising Prices
This myth effectively redefines inflation. When analysts, politicians and pundits talk about inflation, they usually mean rising consumer prices as measured by the consumer price index (CPI). But this is a symptom of inflation. Inflation itself is an increase in the money supply.