What Is Inflation|Price Inflation Versus Printing Money Inflation According to Wikipedia http://en.wikipedia.org/wiki/Inflation, "inflation" has this definition: "In economics, inflation is a persistent increase in the general price level of goods and services in an economy over a period of time." We will call this definition, "price inflation." It is, to be sure, what the vast majority (the bottom 99.9999% of us) feel the greatest economic impact from and is generally what most people mean when they use the term, "inflation," as it results in us spending more and more of our money on less and less goods and services. Price inflation robs us of the wealth that we create and results in a lower quality of life for everybody because it diminishes our ability to freely participate in commerce with each other. Then on same Wikipedia page, the following is also said about inflation: "Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply." “Excessive growth of the money supply,” is generally what economists are referring to when they use the term inflation. Since it is all too common to apply these two concepts interchangeably, and confusingly, to the term, "inflation," we will make a distinction between the two concepts here. As noted earlier, an increase in prices will be referred to here as, "price inflation." "Excessive growth of the money supply," will be referred to here as, "circulatory inflation." The mantra that many economists, particularly the so-called Austrian School, have been repeating is that price inflation is the direct result of circulatory inflation, or by the government "printing too much money." WROOONG! It sounds good on paper, right? In theory, circulatory inflation *could* cause price inflation. In some parallel universe. If circulatory inflation existed there. First of all, the government does NOT print money. With the exception of minted coins, all of our currency is issued by privately held banks at INTEREST. Since all of these privately published representations (which we call currency) have to be paid back to private banks at interest which they never issue in the first place, it is mathematically impossible for circulatory inflation to exist. Second of all, are we to believe that manufacturers and other business owners possess some magical telepathic power to detect when the the supply of currency has been expanded and then automatically raise their prices to compensate? Is that why prices have been increasing as much as 10% annually? WROONG! Since we have been obligated to pay back these representations of entitlement with interest which is never issued, the inevitable result is, in fact, circulatory DEFLATION. In other words, paying interest on every single unit of currency in circulation causes a DECREASE in the volume of currency.

1. What Is Inflation?
Price Inflation
Versus
Printing Money Inflation

2. Price Inflation
According to Wikipedia
http://en.wikipedia.org/wiki/Inflation,
"inflation" has this definition:
"In economics, inflation is a persistent
increase in the general price level of
goods and services in an economy over a
period of time."

3. Price Inflation
We will call this definition,
"price inflation."
It is, to be sure, what the vast majority
(the bottom 99.9999% of us)
feel the greatest economic impact from

4. Price Inflation
and is generally what most people mean
when they use the term, "inflation," as it
results in us spending more and more of
our money on less and less goods and
services.

5. Price Inflation
Price inflation robs us of the wealth that
we create and results in a lower quality of
life for everybody because it diminishes
our ability to freely participate in
commerce with each other.

6. “Printing Money”
Then on the same
Wikipedia page, the following is also
said about inflation:
"Economists generally believe that high
rates of inflation and hyperinflation are
caused by an excessive growth of the
money supply."

7. “Printing Money”
“Excessive growth of the money supply,”
is generally what economists are
referring to when they use the term
inflation.

8. The Distinction
Since it is all too common to apply these
two concepts interchangeably, and
confusingly, to the term, "inflation,"
we will make a distinction between
the two concepts here.

9. The Distinction
As noted earlier, an increase in prices will
be referred to here as,
"price inflation."
"Excessive growth of the money supply,"
will be referred to here as,
"circulatory inflation."

10. Austrian School
Debunked
The mantra that many economists,
particularly the
so-called Austrian School,
have been repeating is that
price inflation is the direct result
of circulatory inflation,
or by the government
"printing too much money."

11. Austrian School
Debunked
It sounds good on paper, right?

12. Austrian School
Debunked
In theory,
circulatory inflation
*could*
cause price inflation.

13. Austrian School
Debunked
In some parallel universe.

14. Austrian School
Debunked
If circulatory inflation existed there.

15. Austrian School
Debunked
First of all, the government
does NOT print money.

16. Austrian School
Debunked
With the exception of minted coins,
all of our currency is issued by
privately held banks
at INTEREST.

17. Currency Issuance
Since all of these
privately-published representations
(which we call currency)
have to be paid back to
private banks at interest,
which is paid along with the principal
out of circulation, it is
mathematically impossible
for circulatory inflation to exist.

18. Businesses As Psychics
Second of all,
are we to believe that
manufacturers and other business
owners possess some magical telepathic
power to detect when the the supply of
currency has been expanded and then
automatically raise their prices to
compensate?

19. Businesses As Psychics
Is that why prices have been increasing
as much as 10% annually?

20. It's Math!
Since we have been obligated
to pay back these
representations of entitlement
with interest out of circulation,
the inevitable result is, in fact,
circulatory DEFLATION.

21. It's Math!
In other words, paying interest on
every single unit of
currency in circulation causes a
DECREASE
in the volume of currency.

22. It's Math!
According to
http://australia4mpe.wordpress.com:
"...circulatory inflation or even
hyperinflation is indeed a mathematical
impossibility under any interest based
monetary system."

23. So Why Do
Prices Go Up?
So, under the current monetary system,
if circulatory inflation is
mathematically impossible,
then what does cause
price inflation?

24. So Why Do
Prices Go Up?
One Word:

25. So Why Do
Prices Go Up?
*Interest*

26. So Why Do
Prices Go Up?
Since interest is embedded into
every single business transaction
in the economy, it is, by and large,
the leading driver of increasing prices.

27. Presidential Ironies
In a 2012 debate with Mitt Romney,
President Obama said:
“It's Math. It's Arithmetic.”

28. Presidential Ironies
Barack Obama's 2008 campaign
returned a package *unopened*
containing mathematical proof
that the current interest-based
system will result in
monetary failure,
knowing FULLY what the package
contained and knowing
who it's sender was.

29. Presidential Ironies
But that is a topic for yet another video.

30. What Is Inflation?
And some of you say,
"Well, inflation is just fact of life."

31. What Is Inflation?
Visit:
People for Mathematically Perfected Economy
Facebook Page
And Ask Questions!
https://www.facebook.com/groups/pfmpe2012/

32. What Is Inflation?
And some of you say,
"Well, inflation is just fact of life."

33. Thanks For Watching!
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