Thu Dec, 11 2008
Let Me Explain Something To You
Try to imagine a poker game.
You and four of your friends decide on a friendly game one evening. Sitting down at the table, you decide on nickel stakes, but nobody has any nickels. Everyone has dollars.
So, upon finding a box of paper-clips, it is agreed that they will serve as tokens in the game. Each paper-clip will represent a nickel.
Everyone buys in for a dollar. Each person receives twenty paper-clips.
The game starts. Round & round it goes. Everyone has had a good time, and it's time to cash out. The paper-clips are gathered, whereupon it is now discovered that someone has sneaked ten paper-clips onto the table during the game. There are now 110 paper-clips representing five dollars.
Question: what has happened to the value of each paper-clip?
That is inflation, ladies and gentlemen. It is only the beginning. This problem becomes enormous once you take those tokens out into a market and try to buy something with them. If you extended this dynamic throughout a national economy, what would naturally happen is that because the supply of tokens has outstripped the supply of goods for which they can be traded, those market goods will now compete -- through higher prices -- in order to gain more of them. This is necessary -- it is a natural law which cannot be repealed -- in order to attempt to keep the value of market goods denominated in these tokens.
Burn this into your minds. Realize that whenever you hear someone describing inflation to you as a rise in prices, they are not telling you the truth. Whether they're lying or simply ignorant, what you must understand is that none of it is true. And if you don't know the facts, then you will have no way of knowing what this rotten government is doing to you right now.