In other words, gold is debt. Our readers know it. The central bankers, once sworn enemies of gold as described by the media, know it and will soon openly embrace it. This leaves the public following historical precedent as the bag holders of currency devaluation.
Headline: Rising prices a symptom of inflation, while debt is cause
Q. This sounds like a simple question, but we have argued over it for weeks: What is inflation? The dictionary says it is rising prices, but I think it has something to do with all our debt.
A. Well, you’re both close. Rising prices are a symptom of inflation — the visible way we measure the impact of inflation. And lately, our debt has become a cause of potential inflation — because of the way we’re dealing with it. Let me give you a fuller explanation. Technically, inflation is just the creation of too much money. That makes it a phenomenon created by the Federal Reserve, our central bank, which is in charge of our money supply.
Think of it as a giant game of Monopoly, with the “banker” passing out money. Remember those $500 bills in the old Monopoly board game? Well, suppose the banker wanted to get the game moving and decided to pass out more money. And suppose, like in real life, when you landed on a property, everyone could bid for it.
If you had been saving one of those $500 bills to buy Boardwalk or Park Place, suddenly with more money in the game, your savings would have less value. And the price of those two prime properties would be bid higher, not because of any inherent change in their value — but simply because there’s more money in the game. That’s inflation!
Source: suntimes.com
