Inflation Nation

[Pro-Life]

Inflation: It's A Wealth Redistribution Scheme
by Tyler Durden Aug 19, 2016 2:10 PM

http://www.zerohedge.com/news/2016-08-19/inflation-its-wealth-redistribution-scheme

Submitted by Russell Lamberti via The Mises Institute...

Inflation as a Process of Wealth Transfer

It is better to think of inflation as a process rather than a particular rate. The process starts with a particular type of monetary system, emerges in an expansion of the money supply by central bank printing and bank loans flowing into various areas of the economy, manifests itself in prices rising generally — though unevenly — higher than they otherwise would have been, finally leaving a wake of winners and losers.

This approach allows us to see inflation as not some inevitable force, but a deliberate process of wealth transfer enshrined in state policy.

How is wealth transferred by inflation? Money represents purchasing power. Creating money out of thin air, which is what central banks and commercial banks are licensed to do, confers purchasing power on those who are able to use the money first. For this new money to obtain purchasing power, it must rob little bits of purchasing power from all the other money in the economy. Purchasing power is transferred from those who hold money to those who create new money at close to zero marginal cost.

This explains how and why wealthy, creditworthy asset owners get richer while many poor people tend to resort to overconsumption and ultimately get poorer. Economist John Maynard Keynes, ironically a proponent of inflationary policies, famously noted that “by a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

There is so much more at the link above...