The Austrian School of Economics has provided investors with a new angle for analyzing asset and commodity prices. In contrast to other economists, “Austrians” do not regard the rising demand for gold, oil, and other assets as the decisive factor behind rising prices. Rather, we consider the ongoing expansion of the money supply, which in our fractionally reserved banking system triggers an expansion of credit, the main factor of the price increase….
From a semantic point of view, it is very important to distinguish between inflation and rising prices Inflation describes the expansion of the uncovered money supply, whereas rising prices denote the increase in the general price level. In general linguistic usage the latter tends to get reduced to the segment of consumer prices. Inflation is the root cause of the devaluation of money, whereas price increases are just the result of inflation.
Please follow SGT Report on Twitter & help share the message.