A Different Way to Look at Inflation
February 18, 2008 by Miranda Marquit
Filed under Finance
When we think of inflation, we often think of rising prices. But Natural News offers an interesting alternative look at inflation:
Most people think the word inflation means rising prices. But the precise definition of inflation is an increasing supply of money which results in the appearance of rising prices. In real terms, prices have not gone up. It is only that the value of the currency has depreciated so that it takes more and more of it to buy something.
Natural News uses the example of gold prices. Gold prices have remained stable, the writer argues, but the US dollar has depreciated to a point that it costs nearly $900 to buy one ounce of gold now as opposed to $35 in 1913.
Many lay the problem of inflation squarely on the monetary policy of getting away from the gold standard. And there are very valid points to this argument. After all, the US dollar is no longer backed by any tangible asset. Instead, it is backed by the fact that the Treasury can always print more money.
What do you think of where our US dollar is headed?
