Adam Smith: debunker of the concept of inflation.  Even though the nominal price of the goods may change, the actual value that they’re traded for may still be equal to the actual market value that was present before the nominal price increased due to the increased presence of cash.

For example: in the Weimar Republic, the high inflation that was caused by the printing of Deutsche Marks for the reparations may have not been the actual cause of the problems, but rather, the short supply of goods for consumption.  The images of wheelbarrows of cash to buy a newspaper may be a practical problem onto itself.  But if the GOODS aren’t available, then the real price is always going to be high, because the goods are in short supply, regardless of the nominal price that appears on said good.

However, if people don’t have access to the appropriate amount of cash bills to equal out of inflation (such that the value of the cash on hand that they have is equal in value to the amount that they had before inflation), it is then that you’re going to have economic problems as the cash becomes less and less valuable.  Therefore, printing more money to make up for problems isn’t the solution to debt, while taking money out of circulation may be a solution to inflation.  Also, imposing unrealistic debts onto people with unrealistic timelines for payments also probably isn’t a wise thing to do either.

Experimentation and research will be in order to sort out these questions.

Think about it.


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