“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
Milton Friedman
Too many dollars chasing too few goods.
Of course, Milton meant 'debt' when he said 'money'. Dollars are debt. M2 is debt, for the most part - 99% of it.
5 minute video by Milton Freedman on youtube called “Inflation Explained” or something like that. He talked about pre-revolution tobacco leaf currency used as the first fiat currency in the Americas.
Basically, early colonialists bartered goods, but the lack of peer to peer trades was very difficult. They started using tobacco leaves as currency, eventually leading to paper money backed by tobacco leaves stored by banks. Colonists just grew more tobacco to deposit at the banks in exchange for the paper, essentially printing their own money. In a matter of only decades, what could be bought with one leaf costed 40. All of the gov’s attempts to reign it in - grading tobaccos, restricting who is allowed to grow tobacco, outlawing growing your own, destroying others’ fields, etc, failed. The tobacco currency was thus destroyed.
The upshot - inflation is caused by printing more and more fiat currency. It is not, and has never been, any more complicated than that. Eventually the paper money is so common it is essentially worthless.
US printed 10 trillion in last couple of years [with nothing to back it except the gov’s ‘word’]. That is why there is inflation. Other factors may nudge it here and there, but that is the primary reason without which inflation could not exist.
Milton Friedman
Thanks for posting that famous Friedman explanation of the root cause of inflation. The politicians will point you in a dozen directions on who is to blame and never get close to naming the U.S. Government and the Fed. But they can’t fool the Freepers.