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Inflation  What You Should Know About Inflation  March 11, 2008
Tags Booms and BustsThe FedMonetary Theory  What Inflation Is
No subject is so much discussed today — or so little understood
— as inflation. The politicians in Washington talk of it as if
it were some horrible visitation from without, over which they
had no control — like a flood, a foreign invasion, or a plague.
It is something they are always promising to "fight" — if
Congress or the people will only give them the "weapons" or "a
strong law" to do the job.  Yet the plain truth is that our
political leaders have brought on inflation by their own money
and fiscal policies. They are promising to fight with their
right hand the conditions brought on with their left.
Inflation, always and everywhere, is primarily caused by an
increase in the supply of money and credit. In fact, inflation
is the increase in the supply of money and credit. If you turn
to the American College Dictionary, for