Inflation: The Hidden Embezzlement

Critics of inflationary policy are correct to describe inflation as a subtle tax, with the heaviest burden falling on the poor. While inflation is indeed a regressive tax, it’s also helpful to view and describe money printers just as we would counterfeiters or embezzlers.

The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.

There is almost complete unanimity among economists and various commentators that inflation is about general increases in the prices of goods and services. From this it is concluded that anything that contributes to price increases constitutes inflation. However, inflation is not a general increase in prices but embezzlement through artificial increases in money supply.

In an unhampered market economy, with a market-selected money such as gold, a producer of goods exchanges his production for money and then employs the money to make further exchanges for the goods of other producers. Production is exchanged for production by means of money.