Deficit spending leads to higher prices because the government borrows money from Federal Reserve. But Federal Reserve does not have any money, so it creates money. That new money decreases the value of all money, leading businesses to raise their
A cost of living increase, in most cases, especially now, should be referred to as a “monetary adjustment”. It’s a request to receive the same agreed-upon value. The money has lost 15% of its value in 12 months. The company
Federal Reserve created 15 percent more money in just 12 months.
The Problem & Solutions
The item used as money, Federal Reserve ‘dollars’, increases in quantity dramatically year to year and simultaneously loses value. These new dollars take value from all existing dollars, like the ones listed in your bank account. (see graphic)
Why do prices rise? Since the value of the dollar decreases, companies raise their prices to get the same value. You’re not paying more value, but you have to pay more dollars because the dollars (the money) is worth less.
If every year we become more efficient due to new technology and new production methods, should things cost more or less? Things should cost less. And the cost of things does fall, but the value of your money falls faster, so prices rise. Your money is worth less because banks create more each year. You need the freedom to choose other money. You need monetary choice. Continue
Inflation is when the amount of money increases. Inflation is not rising prices, though prices usually rise after inflating. When gold was used as money, a huge gold discovery increased or inflated the quantity of money. These days it is banks that create and inflate money. The U.S. inflation rate has been 12 percent per year since 2006. Your salary and savings are worth 50 percent less. Continue