What Is The Real Meaning Of Inflation?

This report aims at answering the above question. There are innumerable ways in which inflation occurs in society. Some forms of inflation are extreme while others are not. Or, like corruption in some societies, it appears normal.
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June 15, 2009 - PRLog -- The Real Meaning of Inflation.

Some people think that if you want to know what inflation is you would have to ask Alan Greenspan, or do the measurement of the GNP, the money supply, and productivity.  But, had you asked Alan Greenspan what inflation is you would have gotten a muddled answer anyway.  The truth is easier to understand.  

If you really want to know what inflation is you would have to ask Bernard Madoff, because he was so good at it, or at least seemed to be.  

That is because so many people think inflations has to do with the value of money, and it does not.  I mean people think they have to ask an Alan Greenspan “What is Inflation?” when they actually know already the value of money, especially when it is lacking!

Money can be symbolic.  It can be useful.  It can make a difference in your life when you have it and when you don’t.  The lack of it means you can not pay your bills.  A plentiful supply of it might mean you can enjoy life more abundantly.  But money is not the real measure of inflation.

The real measure of inflation is found in the value of the goods you buy or sell. It could be the bottle of water, the groceries, the utilities you pay to keep on the heat and lights working in your house.  It could be the house itself depending on how well the carpenters performed the contract to build it.  The real measure of inflation is indeed in the value of the products.  Let me give you a simple example.

– You go to the store to buy your groceries.  Right?  You buy an apple.  Then you leave, take a bite out of it, and you find out the apple is rotten.  Or it has a worm inside of it.  Immediately the value of the apple for which you paid nearly $1.00 at today’s high prices becomes deflated (and the price appears inflated even more).  It has no value to YOU.  Then back to the store you go to request a refund, to get your money back in your pocket.  Or you get an apple that is not rotten.  The point is here that you do not need to ask Alan Greenspan “What is inflation?”  And you are more likely to find out what inflation is when you run into someone like Bernard Madoff who sold rotten apples all the time!  That is, shiny apples in the form of money that was worthless.

You get the point?  It is that most people like you and I understand what inflation really is.  So, we do not have to ask an expert “What is inflation?”  In society, if people ran around selling rotten apples, or cheating their fellow citizens at every turn when they visited the marketplace to buy goods and services, the activity of cheating - or selling goods and services fraudulently - would devalue the money we paid for them.  So it is not the money actually that is inflated, but the value of the products and services that is deflated and causes the problem.  

In conclusion, inflation is related to products:  the value of goods and services themselves.  It is, perhaps, a measure of their value.  Or, more importantly, it is the measure of the cooperativeness of an economy.  The more a society cooperates by providing valuable goods and services, the more an economy thrives.  Individuals get what they had paid for…  When someone says the dollar was ‘devalued’, then that person means the products and services behind them have become worthless, non-existent, or useless. They can not be sold at a higher value…

Now the measure of the cooperativeness of a society can be seen in the activity of individuals who deliver goods and services.  If the individuals always cheat and steal, they do not provide goods and services of any value…  The money becomes ‘inflated’, when actually the products, goods, and services become devalued because of their rottenness!  The problem is not only that individuals may do that (i.e. lie, cheat, and steal), but also groups may, e.g. lawyers and governments historically.  That happens when groups gather together with the sole purpose of devaluing the dollar by lying, cheating, and stealing from society…  Well, you know where that goes…  I mean the reasoning leads to a poor society!  

As a society, we are on the brink of losing our freedoms.  Why?  Well, no one lies, cheats, or steals in society like groups.  Sure individuals do, but no one does it better than governments.  We are on the brink of economic collapse in health care, banking, automobiles, and other major areas of the economy as the government begins to monopolize production.  When that happens the lying, cheating, and stealing will grow.  It will be less a government for and by the people, and more one that serves lobbyists and special interest groups who typically skim from the top their profits like cream from a bottle of milk.  Pretty soon we will only be able to purchase ‘blue milk’.

Rolfe H. Green
Computer Consulting Network

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Source:Rolfe H. Green
Tags:Financial, Business, News, Markets, Work, Money
Industry:Economics, Finance, Marketing
Location:Newton - Massachusetts - United States
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