How Inflation Undermines Culture And Values

Inflation is a process that increases prices, benefiting a few winners and harming many losers whose purchasing power declines. Inflation is caused by governments and commercial banks violating legal principles, and it has devastating economic and moral consequences. The Peel Act of 1844 and the ruling in Foley v. Hill led to fractional reserve banking, which is a form of embezzlement that has disastrous consequences. The gold standard, which lasted from 1865 to 1896, prevented inflation and allowed for great capital accumulation. The Federal Reserve Act of 1913 granted the Fed the privilege of issuing banknotes and led to inflation. The Fed's actions led to a reduction in reserve requirements, allowing for credit expansion and inflation. Inflation has redistributive effects, promoting capital concentration and reducing the number of true entrepreneurs. The growth of the welfare state and militarized state would not have been possible without inflation. Inflation has numerous social consequences, including the rise of consumer credit, the undermining of the culture of sacrifice, and the erosion of incentives to save.