Why Inflation Is Theft

Shanmuganathan N explains:

Any textbook of economics would define inflation as the supply of excess money and credit relative to the goods and services produced, resulting in higher prices. Expansion in money supply is the horse and price increases the cart.

A far more insidious, but less understood, effect of inflation is the transfer of wealth from the late receivers of this expanded money supply to the early receivers.

Read the full piece, it’s quite excellent. My favourite line in it:

I am yet to see a central banker with the intellectual integrity to stand up and say that it is not the price of goods that is going up, but the value of money that is falling.

(Link via email from Sumeet Kulkarni.)