Historical origins of inflation

Mises wire explains the concept of inflation:

“Historically, inflation originated when a country’s ruler such as king would force his citizens to give him all their gold coins under the pretext that a new gold coin was going to replace the old one. In the process of minting new coins, the king would lower the amount of gold contained in each coin and return lighter gold coins to citizens.

“Because of the reduced weight of gold coins that were returned to citizens, the ruler was able to generate extra coins that were employed to pay for his expenses.”

In other words, inflation is the expansion of money, not the subsequent rise in prices. The problem is, people confuse the one with the other.

7 thoughts on “Historical origins of inflation

        1. RE: “That’s all you got?”

          It’s all that’s necessary. Even Wikipedia describes MMT as “alternative” economics.

          Like

          1. “It’s all that’s necessary. Even Wikipedia describes MMT as “alternative” economics.”

            That certainly is fitting seeing how you peddle in “alternative” facts.

            Like

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