What is Inflation ?

Inflation has been in the news lately with riots in Tunisia and Cairo rooted on the hungry masses protesting "primarily" against the sharp rise in price of their daily commodities. But how do the " smart economists" define that concept? Well, it " truly" depends on whom you ask!

The mainstream academia defines Inflation as " a rise in the general level of price of goods and services in an economy in a certain period of time." Faillll !!

Inflation we contend,  is a monetary phenomenon caused by an artificial increase of the money supply which is translated into rising price in some sectors of the economy over time. Inflation has always been caused by revenue hungry governments which resort to debasing their currencies in order to fuel their spending binges. In the old times, kings clipped the gold and silver contained in their coins in order to amass more revenue for their extravagant wars and palace constructions. The same basic process continues today, yet at a much more faster rate because of our FIAT paper system that allows central bankers to create as much digital money as they deem necessary.

 Consequently, with the dollar as the de facto world reserve currency, the US is the prime culprit of price rise across the planet because of the FED's policy of quantitative easing. Mubarack might as well blame Ben Bernanke for the revolts on the streets of Cairo!