Inflation Information Fort Lauderdale FL

What is inflation? Many think it's a simple straightforward answer. But you might be surprised to learn it's not the rise in prices as is commonly stated. So, if that's not what inflation is... then what exactly is it? For the answer, we visit my co-author's blog. Jeff Nabers (5 Steps To Freedom) tackles the task of defining what inflation is and why it's critical that you understand inflation and its real effects.

by Jeff Nabers

What is inflation?

I believe this is the most important financial question a person can ask. I am constantly on a trek to better understand money and wealth. Here is some of what I’ve learned thus far:

Per its original meaning:

• Inflation is not a rise in prices
• Inflation is a rise in the money supply

I have a 1920 Webster’s dictionary that says inflation is a rise in the money supply. I have a 2006 Webster’s dictionary that says inflation is a rise in consumer prices. From this point forward, I will use “inflation” for its original definition (an increase in the money supply) and I will use “price inflation” to refer to a general increase in prices.

How did this “ Newspeak ” happen?

Inflation is harmful because it leads to a rise in prices. When people's expenses are rising faster than their incomes as a result of the actions of the government and banking system, it is like a tax on the American people.

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