MCViewPoint

Citizens’ misinformation about inflation is not their fault. There is an army of so-called experts aligned around governments trying to convince them that inflation is caused by anything and everything except the only thing that can make aggregate prices rise at the same time: devaluing the purchasing power of the currency.

Sound money is as important as independent institutions. It protects the citizen from the perverse incentives of governments to pass their imbalances to the population, and it is essential to guarantee the essence of liberty, which is economic freedom.

https://mises.org/wire/why-governments-hate-honest-money

Daniel Lacalle

The middle class in all developed economies is disappearing through a constant process of erosion of its capacity to climb the social ladder. This is happening in the middle of massive so-called stimulus plans, large entitlement programs, endless deficit spending, and “social” programs.

The reality is that those who blame capitalism and free markets for the constant erosion of the middle class should think better of it. Massive money printing and constant financing of larger governments with new currency have nothing to do with capitalism or the free market; it is the imposition of a radical form of statism disguised as an open economy. Citizens who hail the latest government stimulus plan fail to understand that the government cannot give you anything that it has not taken from you before. You get a $1,000 check, and you pay three times over in inflation and real wage destruction. That is why a group of economists and experts have launched the Honest Money Initiative. To stop the destruction of the fabric of the economy, the middle class, and businesses via constant debasement of the currency that governments monopolize.

Citizens rarely understand inflation. Many believe that inflation is equivalent to rising prices and therefore blame those who place the tag on a product for the loss of purchasing power of a currency. However, inflation is caused by more units of currency going toward the same number of goods and services. Printing money above demand is the only thing that makes prices rise in unison. If a price rises due to an exogenous reason but the quantity of currency remains equal, all other prices do not rise.

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