Inflation

People, including the people that produce media copy, don't seem to have a real grasp of what inflation actually is. They have even modified its mention by an adjective, "price" inflation, meant to somehow differentiate the concept from the destruction of the value of money. 

The current inflation, which has been consciously pursued by those in charge of such matters for years, is merely the latest example of institutionalized theft.

 

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The goal, as expressed by spokesmen for the US Federal Reserve Bank is, among other things, a steady inflation of 2% annually. There's no scientific or empirical evidence that this is necessarily a good thing and many theories that it's very wrong. 

The Spanish Price Revolution, in the latter part of the 16th century and much of the 17th century, caused in part by confiscation of gold from the New World and advanced techniques in mining there and in Europe, resulted in an inflation rate of 1.2% compounded annually over a 150 year period. This meant that prices went up by six times and caused many problems in Spain and elsewhere.

Be that as it may, Fed figures admit that inflation is higher than desired and that their throttle on monetary expansion must be carefully monitored through economic analysis. Their primary tool in this effort is changing interest rates or "fixing the price of money".

The amount of food that could be purchased for $20 in the US in 1913, when the Fed was established, would now cost $662.57, according to the US Bureau of Labor Statistics. Economists aren't too upset by this because wages and salaries have also risen dramatically.

Maybe that's why there's no thought, perhaps as an experiment, given to reversing inflation for even a short period of time, of engaging in an episode of deflation, which, according to many economists would end civilization as we know it. After all, the complexities of economics means that bank economists can't accurately predict the future and how the economy might change in the short term. In reality there is no scientific basis to the workings of central banks and the monetary system. The administrators aren't much different than astrologers or fortune tellers.

Also interesting is the fact that while higher wages in the prole workforce are always regarded as inflationary and so mentioned, other increases in exchange don't seem to get a similar evaluation. For instance, increases in common stock prices are always seen to be a good thing. No one seems to care that college tuition has risen many times that of inflation as have legal fees and medical and drug prices.

The retail price of gasoline is easy to track since it's displayed in huge numbers in front of gas stations. There are no such signs on the front doors of law offices, hospitals and college bursars.