What is Inflation?

Most of us think of inflation as rising prices, but that’s not quite right. Inflation is not caused by rising prices. Rising prices are a symptom of inflation. Inflation is caused by the presence of too much money in relation to goods and services.

What we experience are things going up in price, but in fact, inflation is really the value of your money going down simply because there’s too much of it around. Inflation is, everywhere and always, a monetary phenomenon.

Inflation distorts the economy, it brings great harm to the public and it encourages speculation and mindless risk-taking. In fact, inflation acts as a poison for all savers. It makes saving for the current working generations practically nonsense. And thanks to inflation, most senior citizens no longer able to earn more money in order to maintain their standard of living, are unable to enjoy the fruits of their past labor.

what is inflation

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