DaisyDuke – inflation is not a concern of the Federal Reserve – inflation is one of their main GOALS!!!
There are two ways that governments can pay for doing the things that governments like to do:
1) tax the citizens – this works well but can’t be done to excess because of things like the guillotine – ie, the
citizens eventually get fed up with being over-taxed and revolt
2) institute a fiat currency and print money as needed – this solves the immediate issue of how to finance government but it debases the existing money supply – every new dollar that rolls off the printing press decreases the value of all the other dollars currently in circulation – the debasement occurs very gradually so the citizens tend not to notice
Implementing Option 2, the fiat currency plan, is easier if you can also do these things:
> over-complicate the federal financing system so the citizens will choose not to dig too deeply into the details
> have public officials and academics poo-poo the idea that currencies should be backed by something tangible – hopefully the media will pick up on some phrase like “gold is a barbarous relic” and repeat it mindlessly to the unthinking population
> intentially remove all economic and financial material from the public education system
> get the citizens to believe that a small amount of inflation is acceptable and even desirable
> always present the spin that rising prices are being caused by greedy middle-men and speculators – never talk about how it is actually the slow, steady debasement of the money supply that results in rising prices
> manage the price of precious metals so they do not rise in the face of monetary debasement
> provide funding for economists who believe in Keynesian economic theory – grant them Nobel prizes if possible – do everything possible to support Keynesian economics while ensuring that Austrian economic theory is discredited along with that “barbarous relic”
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Read “Creature from Jekyll Island” and you will see how all of this has been accomplished here in America.
