Inflation results when the amount of money printed or coined increases faster than the creation of new goods and services. Money is a "token" of the wealth of a nation. If more tokens are created than new wealth, it takes more tokens to buy the same goods. Friedman explains why politicians like inflation, and why wage and price controls are not solutions to the problem. Friedman visits Japan, U.S. and Britain.
I guess Friedman must be rolling over in his grade with policy makers on a mission to re-inflate the economy. What scares me the most is that we are on this inflation increasing track globally.
ReplyDeleteNo doubt about that. Jim Rogers seems to be onto something with his bull market prediction on commodity prices.
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