The Political Inquirer

When looking into the past, particularly since the invention of the printing press, there has been a direct relationship between money and war. It is obvious that governments oftentimes go to war. Offensive wars are usually fought, and are usually expensive, especially if there is not much loot to be gained after winning said war.

Clearly, raising taxes to pay for wars is usually an unpopular idea. While a majority of the American population supported the Iraqi war in early 2003, I am willing to bet that the majority of the American population would not have enjoyed a tax hike to pay for the war. Since the government was already spending beyond its limits, the question becomes: how can the government pay for this war? There is an easy answer, and as I stated earlier, offensive wars usually are related directly to inflation.

Representative Ron Paul (R-TX) makes a clear note of this in his latest ‘Texas Straight Talk’,which is called Inflation and War Finance. Here he makes a note that the Federal Reserve is inflating the currency, something they are more than happy to do, while Congress is perfectly happy financing their war in Iraq.

Inflation will end up being the demise of the American economy, as it was in 1929 during the Great Depression. Another economic recession is more than likely coming as inflation is starting to spiral out of control. Controlling interest rates as the Federal Reserve says it does doesn’t stop more money from being spent, or the Reserve itself from buying assets. Since M3 is no longer published, inflation is coming as this blogger made mention of.