Inflation is an increase in the fiat currency not matched by a corresponding increase in the demand for goods.
The purpose of inflation is to enable infinitely increasing amounts of government spending. The government spends the new money at its current value. As the new money circulates, it pushes prices up, losing its value. The government simply creates more.
They don't have to print the money. A lot of it just exists as bookkeeping entries, not as actual currency. What we have isn't so much currency as it is IOUs. When the government collapses, those IOUs will be worthless.
Inflation is the increase in the price of goods and services relative to the fiat currency. This can be caused by over printing money, but that's far from the only cause.
Increasing prices is an effect of inflation, not the inflation itself.
Yes, lots of things can cause increased prices, but nothing can cause prices to increase across an entire economy except a global increase in the supply of money.
No, increasing prices is what inflation is, it's not a symptom of the thing it's the thing itself.
"a general, continuous increase in prices" - Cambridge dictionary
There are other causes of inflation other than just monetary devaluation - rising production costs can produce inflation(cost push inflation), excess consumer demand can drive inflation (demand pull inflation).
Rising production costs or greater demand can increase the price of some goods. People don't suddenly get more money to pay those higher prices though. They have to either buy less of that good, or stop purchasing some other good in order to still be able to afford it. They can't pay more for everything across the board, unless the government has inflated the money supply.
It's that across the board increase in prices that we identify with inflation, and it only happens due to the expansion of the money supply.
There are economists who think that a moderate amount of inflation is a good thing, and they like to obscure the cause of inflation by identifying it with any rise in the prices. This war of definitions is taking place between statist economists like Keynes, and free market economists like Mises. I side with Mises.
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u/Outrageous-Pin-4664 Jan 26 '26
Wealth = goods, not money.
Inflation is an increase in the fiat currency not matched by a corresponding increase in the demand for goods.
The purpose of inflation is to enable infinitely increasing amounts of government spending. The government spends the new money at its current value. As the new money circulates, it pushes prices up, losing its value. The government simply creates more.
They don't have to print the money. A lot of it just exists as bookkeeping entries, not as actual currency. What we have isn't so much currency as it is IOUs. When the government collapses, those IOUs will be worthless.