Inflation

According to mainstream economists, inflation aids economic growth while deflation impairs growth. Austrian economists, however, point out that in much of US history, economic growth was accompanied by deflation.

Through its coercive monopoly over money creation, government constantly engages in silent theft through inflation, all done in the name of “stimulating” the economy.

According to mainstream economists, inflation aids economic growth while deflation impairs growth. Austrian economists, however, point out that in much of US history, economic growth was accompanied by deflation.

The political establishment is trying to stoke panic that Trump is “politicizing” the Federal Reserve. But it’s already political. The real danger, from their perspective, is not that Trump is changing the Fed; it’s that he’s making its true nature harder to hide.

Mainstream economists have justified the creation of the Federal Reserve because they claim that a growing economy—especially the banking system—needs an “elastic” currency. In other words, the economy “needs” at least some inflation. Austrian economists know better.

Lower interest rates can help promote economic growth—as long as those rates are determined by the market and not by political edict.

The gold price is off and running this week. But, money creation isn’t listed as a cause.

Inflation isn’t just about higher prices. It is how unwarranted increases in the money supply touches off wealth transfers from those who are less-well off to people who are close to the new injections of money into the economy.

Inflation is not going away anytime soon, and it is ravaging the American middle class. Unfortunately, no one in Washington is interested in doing what is necessary to reverse this scourge.

Since becoming president, most of the actions taken by President Trump have been anti-economic growth, and the US economy now is sputtering. Unfortunately, Trump seems to believe that a combination of trade restrictions and inflation is what the economy needs.