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IPFS News Link • Inflation

A Dark Side of Inflation

• Jacob Hornberger - FFF

Already, everyone is seeing, for example, significantly higher prices for gasoline at the pump. The price jump is high enough to cause people to realize that all that "free" stimulus money wasn't as free as the government said it was.

There is another dark consequence of an inflationary expansion of the money supply. The inflationary policy distorts market signals, which causes both consumers and businesses to engage in actions in which they would not ordinarily engage.

For example, consider what can happen when the Fed artificially lowers interest rates as part of its inflationary policy. Consumers are encouraged to buy homes, which they ordinarily could not afford to do.