Friday, 17 June 2011

People becoming indifferent to cash is not the only cause of inflation

The banking institutions would not be able to cause inflation if not for the government. Without the government the banks would not be able to alter the price of cash.

The explanation for inflation is not that people are slowly becoming indifferent to cash, rather (it is) that the money supply (of cash and state credit) is being increased by the banks.

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