“Perhaps the single most important and most thoroughly documented yet obstinately rejected proposition is that “inflation is always and everywhere a monetary phenomenon.” That proposition has been known by some scholars and men of affairs for hundreds, if not thousands, of years. Yet it has not prevented governmental authorities from yielding to the temptation to mulct their subjects by debasing their money—taxation without representation—while vigorously denying that they are doing anything of the kind and attributing the resulting inflation to all sorts of other devils incarnate.”
That quote is from Milton Friedman’s final chapter “An Epilogue” of his 1992 book Money Mischief. Governments, he correctly notes, cheat people out of their wealth by inflating the currency. It’s a pernicious way of levying taxes. This is exactly what the US government is recently doing with gay abandon. But as certain as the fact that the sun will rise tomorrow is the fact that inflating the dollar will end up badly.
Let’s continue with what Friedman wrote: Continue reading “Friedman on Inflation”