Inflation

GDP is a ridiculous way to gauge the strength of the economy. While prices on Wall Street remain robust, trouble lurks on Main Street.

Thorsten Polleit (TP): On November 5, 2024, Donald J. Trump was elected the new US president with a landslide victory.

Mainstream economists are united against deflation, which they claim is the cause of recessions. Austrians know better, as they understand that deflation raises living standards and prevents destructive asset bubbles.

Government paper fiat money does more than just cause economic havoc. It also is an exercise in profound dishonesty and theft.

Argentina President Javier Milei is proposing a new law that would “declare it an imprescriptible crime for the state and the central bank to monetize the public deficit and create inflation.” While it may be politically rejected, it does point to the real dangers of inflation.

Perhaps John Maynard Keynes' best con job was convincing people that a growing economy needs inflation, lots of inflation. As David Gordon points out, however, Ludwig von Mises eloquently explained why inflation undermines the free market economy.

We have reached this point: the government keepers of money do not even understand what money is or why inflation is harmful. To them, the real threat to the economy is “deflation.”

The child-like obsession with buying stuff that American society is often criticized for around Christmas is a sought-after result of our government’s monetary policy.

President-elect Donald Trump has declared that he will raise tariffs his first day in office. Our economy, however, does not need government-created roadblocks to trade. Instead, we need free exchange and sound money.

One of the fallacies pushed by monetary economists is that a growing economy needs a growing supply of money in order to prevent deflation, which they claim is as harmful as inflation. However, as Austrians point out, there is no “optimum” amount of money in the economy, since prices adjust.