Money is a fiscal unit that functions as a generally accepted medium of trade for transactional purposes. But that unit does not maintain its given value all the time.
The money can lose its value more often than it gains. When it does, we lose our purchasing power. That is the product of inflation.
Inflation is the deterioration in buying ability of a given currency over time. Using the phrase “time” is a cliche, merely because today, inflation is not only the product of time.
Inflationism; the Heterodox Economy
There are those who, in one way or another, support the iatrogenic precipitation of economic inflation or influence in monetary value, thus also support belief in inflation as an instrument. Of course, inflationism is the philosophy that predicts the tangible levels of inflation are innocent, desirable, and at times even beneficial to the economic market rehabilitation.
Mainstream economics clasps that inflation is crucial depravity. It advocates; a low, stable level of inflation.
A growing sum of central banks has adopted state of Inflation targeting as their monetary policy framework.
Some studies support the idea that there are two different optimizing monetary models with monopolistic competition. They include the financial services channel and the” capital tax” channel. The first of these is founded on the money demand behavior that leads to less real money held when inflation rises. A decrease in monetary services brings about the need to use some resources to cover transaction costs. The” capital tax” channel can be described by saying that higher inflation affects the mark-up of prices over marginal costs, which acts as a tax on capital accumulation decisions. Many economists believe that prices are “sticky” because they tend to adjust slow lines. This stickiness presumably implies that the money supply changes impact the real economy, inducing changes in investment, employment, output, and consumption, an effect that is often exploited by policymakers.
Thus, the price-fixing has a significant influence on the steady-state analysis of inflation. The prevailing belief that the” capital tax” can be affected by inflation only if prices are sticky and at least a fraction of the non-optimal costs are not indexed or simply adjusted based on the changes in another price. By contrast, if prices are sticky and there is not full price indexation, the” capital tax” channel becomes the driving force governing the steady-state effects of inflation.
The Double Standard of an Inflationary Economy
Governments have historically relied on crucial monetary value deprivation or purchasing power, yet they continually fight inflation. What determines the choice between fight or inducing inflation is vague. According to some sources, there is a positive relationship between inflation and income inequality if the states exceed an inflation rate threshold. The inflation rate lowers income inequality.
Inflationism is Monopoly
A monopoly gives a tremendous competitive advantage to one entity or person over another company that provides a similar product or service. Hence, price-fixing, indexing, and intentional inflation induction serve as the monopoly instrument, only at a larger scale. It provides the opportunity to some and deprives them of buying power from others.
The monopoly pricing concept rests on the assumption that monopoly capital pursues the highest profit rate sustained over the long-run. Thus, in a period of prolonged start, monopoly pricing will set off an inflation process, perpetuated through the interaction of monopoly capital, competitive capital, and the working class. Based on what is said, the state’s function is to process inflation, such as corporate bailouts and central bank monetary expansion.
“Inflationism is the epitome of economic autocracy disguised under innocent interventionism.”
Inflation is the killer by chokehold! — It slowly undertakes the people’s worth by gradually reducing their buying power. Indeed, it is a hidden tax that we don’t typically perceive, or probably we are not supposed to distinguish! Governments cause inflation by printing dollars to fund each year’s deficit spending, thus devaluing the already circulating money, that is, your sweat-earned cash. And when the government takes printing money, prices stabilize. But most, if not all modern governments, want their constituents to believe that inflation is some naturally occurring phenomenon, and some level of inflation is a good thing to have, refusing to acknowledge that with inflation, we ultimately pay more and more for everything we buy through reckless government overspending.
“Inflationism is the state-sponsored monopoly, as it appears innocent to most, encouraging to few, defrauding to the mainstream, but dire to everyone’s sovereignty.”