Inflation results from policies implemented by governments, commercial banks and central banks.
A Few Consequences
Gary Christenson – More currency placed into circulation devalues all currency units. We can thank fractional reserve banking, deficit spending and QE.
1- Stock markets rise as each currency unit buys less.
2- Commodities rise in price.
3- Incomes, taxes, debt and government expenditures rise.
4- Politicians spend more currency units as they reward friends and buy votes.
5- The wealthy become richer and the poor and middle class suffer as prices rise while wages stagnate. More stagflation is coming in 2018 – 2020.
6- Inflation discourages savings and encourages spending and debt creation.
Examine official national debt and M3 currency in circulation at ten year intervals on a log scale for a big-picture perspective. Continue reading