3. Money — what is it? Money is a good that acts as a unit of account, a store of value, and a medium of exchange
9. INFLATION — what is it? Wikipedia defines Inflation as : a rise in the general level of prices over time. It may also refer to a rise in the prices of a specific set of goods or services (e.g. energy, food, housing, etc). In any case, inflation is measured as a percentage in the rate of change of a price index . But that inflation definition (like most others you will find) is like putting the cart before the horse. Inflation is caused by a net expansion of money supply that “ causes ” rising prices -- by devaluing a currency Stated differently: the expansion of a nation’s money supply increases available currency beyond the proportion of available goods and services – causing more dollars to chase the same number of goods/services. Thus it creates a supply/demand situation that drives prices higher. In Reality:
10. Growth of US Money Supply 1959-2005 Came off gold standard here $10 Trillion $700 Billion
11. Growth of US “Fiat” Money 2004 + Fed is printing money at 20% annual rate; money supply to double in 4 years Yes, $14 Trillion Dollars! Yes, a 20% rate of growth !
14. By “understating” Inflation US GDP is “overstated” Gvt’s “massaged” figures say we’re not in recession The Real figures say we are in Recession ** Negative Growth **
15. Total Credit Market Debt Came off gold standard here 2008 is ~ 400% - Debt ~ $53 tril - GDP ~ $13 tril
16. Total US Debt Through 2007 Note that income hasn’t kept up with Debt levels