Inflation And Devaluation
John Ink2Quill Opinion
www.ink2quill.com

There are a lot of talks on inflation nowadays and for good reason. The prices in many Western countries continue to rise as we continue to find metrics that make them look less severe. Inflation to an economist is a little like gravity to a physicist in that it is hugely important, ever present and you can never really ignore it. No matter how much you try to explain it away its influence extends far and wide. Maybe physicists should finally call gravity a force and economists ackowledge the existence of a phenomenon called inflation that is not just the result of heavy borrowing and expanding the money supply. Those ideas should not be heretical? I wonder how many people have consulted the oracles of A.I. about that. I would be willing to bet that the A.I.s out there would have plenty of interestingthings to tell us about that,if you look past their hallucinations.

So, what can inflation tell us beyond the obvious? Firstly, what is the obvious? In case you’ve missed things since the Industrial Revolution or even the ancient empires like Rome or Egypt when inflation hits and stays the prices of goods go up. This can get really dangerous if it persists or is acute because the people in power who most often expect a cushy life will find themselves making decisions that patch the problem and don’t really solve it. So generational inflational can lead to war and a loss of population of a country or empire.

What are some of the other effects or results of inflation? Beyond the price hikes I think this “Inflation Effect” will have a cultural impact on the West. In some countries I’ve seen people I know spend less on going out and hanging out in shops and malls. They will look to cut back their spending and shop online. While others I know who are not affected by inflation in their day to day lives are still buying what they buy. What I’m saying is that the economies of these Western countries affected by inflation are seeing a segment of consumers shrivel. This is a blow the economies of such countries and some handle it better than others.

Another effect of inflation is that things to buy become more expensive while the medium of exchange to buy such goods sinks in value. These are two very different phenomena. One is an increase in the value of certain goods while the latter is a loss of a medium of exchange in extreme cases.

I’ve experienced a bout of extreme inflation just by moving from one country to another. When I moved from one country with a lower cost of living to a country and city that is so much more expensive this was a kind of sudden inflation. Suddenly I found myself paying more for everything and not necessarily getting better quality for the price increase either. This was a drain on my quality of life and now I understand why some of the people I know moved back. When you experience sudden inflation you can feel cheated by the country or city you live in.

One positive result of inflation in our time is that it offers the best time to make big changes in society and to the economy. Entrenched and outdated systems can better be changed or eliminated. New technologies and all the industries that can feed and create them can be more easily grown. With the right leadership this can be a time of incredible innovation and growth.

In the end I think that innovation and growth will cross the globe and settle in the places where it is most able to. It’s a little like a finding a balance.

John Ink2Quill

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