What is Inflation in Terms of a Nation’s Currency?

Inflation, simply put, is a tax that the government places directly onto the working people of a nation without calling it a tax.

Bidenflation

This is typically the worst kind of tax that a government can inflict upon its citizenry because it often takes the greatest toll on the population in terms of poverty levels and who ends up falling below those poverty levels. Inflation has always taken place throughout history, and in times when societies only used precious metals as currency, the leaders of those nations who chose to inflate the currency would clip small chunks from the edge of that nation’s coins as they circulated throughout the civilization.

This wasn’t something that a ruler in a given nation could easily conceal from the public’s attention because it is obvious that the coin a person has in their hand with a portion of it chopped off as opposed to one that isn’t missing a portion of it, those two coins are going to have different weights from one another if placed on a scale and weighed. It should be very easy to see where this could cause problems in the general public in a nation using such a monetary system. If I have coins minted by the government that are based on a standard of weights and with that nation’s stamp on it which basically certifies that it weighs what it is supposed to weigh but has a chunk missing from it, then it obviously isn’t worth what the government’s stamp on it certifies that it is worth.

Needless to say that inflation wasn’t easily accomplished in societies that used precious metals for their coinage and their monetary systems. Such tactics caused problems that often were compounded after people and merchants began to figure out that they could chop chunks off of the coins themselves and nobody could tell whether the government had done this or some other individual had. This could quickly destroy the reputation of a ruler and that ruler’s seal and what its certification was worth in general.

In societies like ours with monetary systems that are based on a fiat currency where the value of that currency is controlled by the government that implements it and by whatever means they use to guarantee the value of it to the people who possess coins or bills issued by the government, it is the executive branch of government has ultimate control over inflation. If inflation takes place in such a monetary system, it is a direct result of the top executive within the Executive branch of that government deliberately causing it to happen, and that is the only way that inflation can happen in such a system. This is a fact and it can’t be debated.

This can, and it does, only work in this way. If inflation happens to a fiat based currency, it is both deliberately caused and it is caused directly by the top Executive in a particular nation’s government. In the case of the United States of America, the only person who can control this is the President of the United States, and nobody else. The buck literally stops with the President in the United States of America.

It is important to note here that fiat currency is not Constitutional as the United States Constitution specifically lays out that our system of currency must be backed by precious metal or equivalent. This was specifically designed by the founders to prevent the federal government from doing certain things that it should not be able to do, but ultimately all of the things which the founders were attempting to prevent equate to a single thing, which was to prevent the federal government from growing beyond the originally intended scope of its bounds.

This was well designed up until the point when our leaders at various points in time over the years steered our nation off of the gold and silver standards, and back our currency with alternative substance of value. They did so specifically because they found themselves in a position at those times where they had more constraints on what they could legally accomplish than they were willing to dutifully accept as set in stone, or in gold or in silver for that matter.

It was in 1913 when President Woodrow Wilson and other very influential and powerful men of the time devised a way to begin to end the gold standard, as well as the income tax. Both of those had never been done in the United States of America and that is mostly because neither of those things were Constitutional. Diverting from the gold standard was actually specifically prohibited in the Constitution in a very easy to understand, concise, and clear manner that left no room for any kind of argument or debate on the matter.

It simply is not allowed under the U.S. Constitution for our currency to be based on anything that hasn’t historically always been used as a form of money such as gold or silver. Nobody can argue that gold or silver hasn’t always been used as money because historical records dating back to the earliest records clearly indicate that these substances have always been used for that purpose. This is a matter of historical record, and the entire population on the face of the earth has generally always been aware of this.

There is a lot of history and historical fact behind how the United States ended up with a currency that is not backed by historically valuable, physical substance. That is not really the point in this post so I will leave it to you to further research all of the details related to this topic. The main point here is that it really wouldn’t be possible for our government to inflate the currency if the currency were still backed by gold and silver as it used to be, and the value of gold and silver were based on standard weights and measures.

It is only because we are on a fiat based currency that the top executive in the United States can unilaterally decide for the sole purpose of politically related reasons to impose a tax on every citizen and every resident in our nation. That can really only take place under a fiat system of currency. Fiat currency also allows the government to grow without limitations, because if a leader decides at any given time that they are too constrained by a money supply, or they have accumulated too much debt and it isn’t sustainable, ultimately they can inflate the supply of money which places all of the previous poor choices made by everyone in charge leading up to that point onto the population of the nation.

Inflation is a way to make a population pay for the mismanagement of every administration before it and including the administration that implements inflation, dating all the way back to whatever administration previously inflated the currency. In other words, when inflation takes place, the people are being taxed for all of the worst management the country has had since inflation last took place all the way up until the present administration.

Inflation is a deliberate and intentional, covert tax. Anyone who doesn’t understand what inflation is, the history of it throughout history, and doesn’t have a decent understanding of basic economic principles won’t likely even understand that they are being taxed because it is being done in an intentionally deceptive manner that is intended by the people who implement it to not be easily seen.

Raising Minimum Wage and then Inflating that Nation’s Currency

What good does it do to raise minimum wage in a nation if you inflate the currency immediately afterwards?

Essentially you have done nothing in terms of benefitting the worker who is earning the paycheck because you have greatly reduced the purchasing power of the nation’s currency. The worker makes more money per hour than he or she used to, but following the top executive’s choice to impose inflation on the nation’s currency, the worker can still only purchase the exact same amount of goods and services as they had previously been able to prior to inflation, or in some cases that worker can purchase even less than they could before.