The Political Inquirer

Today’s Yahoo report on the money system and the economy shows that prices went up in general in the economy–so that means inflation is up. Where, though, is the real reason for the inflation? Prices don’t just “go up” and inflation doesn’t just “happen.” It is rooted in the government printing money and nothing less. If there isn’t more physical money created, then there has been electronic money created or made out of thin air and written down on paper.

The Federal Reserve and central banks in general are the guilty parties of inflation. Remove the central bank and government interference in the money system, and you fix the problem.

It just boggles my mind how economic reports always leave out the key ingredients to the problem. If you’re going to talk about inflation, then mention how the Federal Reserve has put out massive amounts of money into the system. Mention that the Federal Reserve’s “rate cutes” that Bernanke is pushing for are nothing less than a way to borrow money at a lower rate–money that the Fed will create out of nothing–money that eventually inflates the money supply.

The more money you put into the system, the less you use. To use an analogy from Lew Rockwell, we’ll take orange juice and water. If orange juice is the original amount of money, and you keep adding water to it, eventually you can’t tell that there was originally orange juice in the container–it appears to be all water. Money is becoming less valuable, so it takes more to make up for what something used to cost. That is the reason prices go up, all else being equal. If prices go up for another reason, then it isn’t inflation.

Stopping the central banks and the Federal Reserve is crucial to a healthy economy.