[Yo-Yo]

Unfortunately, a certain amount of inflation of the currency is mandatory for a growing economy. If there are, for example, $1 Trillion in currency and a US population of 200 million, when the population grows to 300 million the money supply needs to grow to $1.5 Trillion.

The problem arises when the government raises the currency to $3 Trillion instead of $1.5 Trillion.

[JaneNC]

I blame all third party kooks.

Look what happened in 1992

Vote McCain or you will get a Marxist

[managusta]

Two weeks ago PhD’s were rarer than rocking horse droppings, now everyone you meet has one...........can you bypass college and get them at Walmart?

[supercat]

Unfortunately, a certain amount of inflation of the currency is mandatory for a growing economy.

Further, even if currency were pegged to gold, there could still be inflation and deflation as a result of investment and lending. I earn $100 and invest it; someone else gets a loan with some of that money and uses it to hire workers and buy materials, etc. Those people in turn invest their money, etc. In some situations, people will want to have more physical hold; in other situations, people will want more other things. If those who manage the money supply could be relied upon to have pure motives, paper money could actually be more stable than gold. Too bad they can't and it isn't.

[djsherin]

No it isn’t. Prices would just fall because money would become more valuable with regards to other goods. Monetary inflation or manipulation is never necessary and if allowed, the free market will choose the best medium of exchange, that is something that is durable, hard to counterfeit, relatively scarce, and universally seen and accepted as valuable (with regards to exchange). Traditionally this role has been filled by gold and silver (occasionally copper).

[Jack Black]

Murray Rothbard wrote a whole book about why that is not true called “The Case Against the Fed”. I am not sure he is right, but it was an interesting book.