More on Inflation

Here are a couple of video clips that I thought were very poignant with regards to inflation and monetary policy.

The first is a clip of Ron Paul questioning Fed Chairman Bernanke who agreed with Ron on the subject of inflation but then in typical government fashion pushed it aside and diverted attention to price issues which have nothing to do with inflation.

Remember, inflation is simply an increase in the money supply NOT an increase in prices per se although inflation will cause prices to rise. Absent inflation prices are a function of demand and supply. This is high school economics but listen to how hard it is to understand Bernanke who is so revered by the main stream media and most politicians as the maestro that will lead the class to the promised land. Then contrast to Ron Paul's common sense comments.



I think that someday we'll look back on the Federal Reserve Act of 1913 that created the Federal Reserve with disdain. In that act congress delegated it's constitutional authority to "coin money and regulate the value thereof" (Article 1, Section 8 of the US Constitution).

This second clip is Ron Paul commenting on the discussion in the first clip.


Under our current circumstances the Fed is already pumping "liquidity", short for printing money or creating inflation, into the market place. In the short run it will benefit big financial institutions. Current Fed policies will erode the value of the US dollar and US denominated assets.