You are viewing a single comment's thread from:

RE: Inflation - A Hidden Tax : What Is Inflation & Why Children's Savings Accounts Are Unwise!

in #life7 years ago

Note how they have been very specific to cast inflation from only one perspective, the perspective of price. By limiting the perspective to this one viewpoint, they hope to blind the people to what is really going on.

Truthfully, it is a somewhat complicated concept. Look at Weimar Germany and its hyperinflation -- most of the people didn't understand what was going on. I actually think that most of the monetary authorities responsible for the catastrophe didn't even really understand what was going on -- intellectual brilliance, after all, is not a requirement for government service, and in fact is often an impediment to government service.

The Weimar government, just like the Venezuelan government today, blamed "speculators" for the effects of inflation. The people only knew that shopkeepers, who were often Jewish, kept raising prices. Thus they had a deep seated anger against the shopkeepers, whose greed they blamed for their money losing value, and this anger eventually surfaced through the medium of the Nazis, who were willing to point fingers at the Jews as a sector of society that had damaged society. The German people didn't necessarily harbor a white hot racism, they were just wounded badly by something they didn't understand and were encouraged to point that hatred at a particular ethnic group.

Inflation is just dilution. Plain and simple.

Think numerator and denominator. The denominator is the bottom number. It tells you how many of something you have in the total population or the total set that you are looking at. The numerator is the top number. It tells you how many out of the total number of things your are looking at that you actually have.

Take the fraction 1/10. This fraction means you have 1 thing out of the 10 things that there are in total.

So now, if you increase the denominator to 20, your fraction is now 1/20. Which is half of 1/10. So you can change the number of things you have by either changing the numerator, which is what you hold in your hand, or by changing the denominator, which is a more tricky way of changing what you hold in your hand because it changes the value without ever touching the thing in your hand. Which is also why many people don't understand it.

Printing money adds numbers to the denominator. Which is why many people don't understand it.

Coin Marketplace

STEEM 0.15
TRX 0.15
JST 0.028
BTC 54034.48
ETH 2262.26
USDT 1.00
SBD 2.31