Fiat Currency: Inflation Detailed Analysis

Fiat Currency Historical Inflation and Debasement: A Detailed Analysis

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What is Inflation: Inflation can be defined as when over time the market price of something of value moves up. Inflation is just the movement over time of an index of the relative balance of something of value and the monetary volume received in exchange.
1. Inflation: The increase of the volume or total quantity of Fiat Currency or other value-unit to acquire a good, a service or something of value is Inflation. Usually the indexed volume or amount is referred to as the Price. The fixed index value or price of the embedded production value of goods and the time required for services does not usually materially change in the short-term.
2. Deflation: The opposite is Deflation. By design all governments try to eradicate and eliminate it at all costs. They believe that having a short-term increase in the value of debt and loans has detrimental effects that can not be tolerated. This is a fallacy and is completely incorrect. Occasional short term Deflation is good because maintaining a stable value of the currency remains important.
  1. No Deflationary Counterbalance: With continuous and compounding Inflation and without ever having a Deflationary counterbalance on the system, debt has been ever increasing. When the debt collapses, due to decades of built-up debt levels, the resulting collapse and correction will be based on the total combined back-pressure and volume. That collapse may be sooner than most realize.
Government Rules: The Government issues Fiat Currency, defines the rules of debt based capital available to an economic participant, runs the taxation system, commissions government work, and completes procurement. When the system of available Fiat Currency exceeds the available resources, the Price of those resources will increase without any other benefit.
1. Inflation Creates No Real Value: The net effect of increasing the Price of goods is simply having to expend more units of Fiat Currency for the same real Store of Value goods and services without an associated increase in quantity, quality, or other measure.
2. Inflation Suppresses Real Income: Inflation is not advantageous and is not supportive of positive outcomes for economic participants as their specific income or return on investment will almost always be delayed or lag behind the actual Inflation rate. The gap between these two values can be extremely negative for economic participants.
The Current Low Rate of Inflation: Currently, Inflation is presented and observed as being relatively low. Most people assume the situation will not change materially over time and things will just "stay this way". Based on economic history across the world and across different societies, this assumed stability remains extremely unlikely.
1. Inflation Manipulation: The recent low Inflation rate is materially artificial, substantially masked, and is highly manipulated. This is an extremely complicated area of economic theory and practical financial application.
2. Eventual Equalization: Inflation in the current environment is highly contrived and sooner or later, the true Inflation rate, cost, and impact will be realized by all parties. This outcome will be highly detrimental to all parties.
3. Technology Benefits: The current deflationary pressure of technological advancement, innovation, and increased productive efficiency is real, measurable, and helps counteract real currency and monetary Inflationary pressure. The associated benefits substantially help all people, across all societies, and across all economic classes. When adjusted for magnitude, the benefits are greater for the least socially affluent and economically powerful.
Low Inflation Manipulation: Inflation has been largely off-set and counter-balanced by Government Debt.
1. Government Money Removal: The reason that Inflation has not yet accelerated is due to the tremendous amount of government issued and lender funded Government Debt.
2. Removing Available Capital (For a Short Time): The tremendous volume of Government Debt and borrowing has a strong short-term Deflationary effect and uses virtually all available funds. This action vastly diminishes and masks the short term and real-time Inflation rate. Generally after an economic crisis, the government just prints money. Once the deluge of additional principle and interest funds are made available in the money supply, the Inflation rate is greatly accelerated or the currency is Debased.

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Fiat Currency Historical Inflation and Debasement: A Detailed Analysis

Skip this Detailed Page

What is Inflation: Inflation can be defined as when over time the market price of something of value moves up. Inflation is just the movement over time of an index of the relative balance of something of value and the monetary volume received in exchange.

Inflation Creates No Real Value: The net effect of increasing the Price of goods is simply having to expend more units of Fiat Currency for the same real Store of Value goods and services without an associated increase in quantity, quality, or other measure.

Inflation Manipulation: The recent low Inflation rate is materially artificial, substantially masked, and is highly manipulated. This is an extremely complicated area of economic theory and practical financial application.

Eventual Equalization: Inflation in the current environment is highly contrived and sooner or later, the true Inflation rate, cost, and impact will be realized by all parties. This outcome will be highly detrimental to all parties.

Low Inflation Manipulation: Inflation has been largely off-set and counter-balanced by Government Debt.

Government Money Removal: The reason that Inflation has not yet accelerated is due to the tremendous amount of government issued and lender funded Government Debt.