We have heard the word inflation misused so often we just assume it to mean rising prices. But actually, inflation is the cause of rising prices. Inflation is an increase or inflation of money in the marketplace.
When government wants to spend money it doesn’t have, there are options as to how to come up with it. One is to float bonds; another is to borrow the money at the price of paying interest.
A third, in America at the federal level, is to print more money. That is the equivalent of me just taking my checkbook and writing in a deposit of however much I happen to want without making a deposit and the bank honoring it. Of course, I’m not able to do that—but our government does by putting more money in circulation. The result is the inevitable law of supply and demand. When there are fewer dollars vying for goods and services, prices go down; when there is more purchasing power, prices go up.
Right now we are facing a huge nationa...
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