As an economist by trade, please know that the (economic and dictionary
) definition of "inflation" begins as an increase in the supply of money relative to the real goods and services available in an economy. The result of this "inflation" of the money supply is an increase in prices as "too much money chases too few goods
This last week the big economic news was the Federal Reserve Bank
announcing that it would not "taper off
" their "qualtitative easing
" program of purchasing U.S. Treasury debt
by creating - literally out of thin air
- $85 billion per month in new reserves for the banking system.
Please understand that each and every dollar "created" in this is now out there competing in the goods & services markets with the dollars you have earned.
Whether this is "good" or "bad" I'll leave to you. Just know that it "is".
Here is what John Maynard Keynes
had to say about this process:
"The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens
<message edited by MetroplexJim on Tue, 09/24/13 8:09 AM>