Wednesday, May 31, 2006

Why the dollar inflates

I was doing some serious thinking about inflation and the dollar, and I came up with what I think is an excellent theory.

Points:
1. People always want to make more money. In our society, we judge success by how much income a person is making, so everyone who wants to be successful must earn more.
2. If the total amount of money in the nation is stationary (as it would be if our money was backed by gold), then the only way one person can make more money is to take that money from someone else, forcing them to earn less.
3. If we want to protect the poor, we can instead increase the amount of money in our nation. This causes the value of the money to be less, but allows people to *believe* they're becoming richer without actually becoming richer. Sphere: Related Content

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