30 Inflation Quotes

I regard the inflation acts as wrong in all ways. Personally I am one of the noble army of debtors, and can stand it if others can. But it is a wretched business.

If this is the degree of inflation planned for in advance, the real outcome is indeed likely to be such that most of those who will retire at the end of the century will be dependent on the charity of the younger generation. And ultimately not morals but the fact that the young supply the police and the army will decide the issue: concentration camps for the aged unable to maintain themselves are likely to be the fate of an old generation whose income is entirely dependent on coercing the young.

Inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary. For this reason all those who wish to stop the drift toward increasing government control should concentrate their effort on monetary policy.

There may be few instances in which the superstition that only measurable magnitudes can be important has done positive harm in the economic field: but the present inflation and employment problems are a very serious one.

I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.

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. ... A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth. It will not produce perfect stability; it will not produce heaven on earth; but it can make an important contribution to a stable economic society.

'Whosoever controls the volume of money in any country is absolute master of all industry and commerce.... And when you realize the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.

'The reason it's on the rise is because probably the boom times are getting even more boomer.' (commenting on rising inflation in the Irish economy)[1]

On the other hand, the economists are at this moment called upon to say how to extricate the free world from the serious threat of accelerating inflation which, it must be admitted, has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.

All my adult life I have seen British governments driven off their virtuous pursuit of low inflation by market problems or political pressures. I was under no illusions when I took Britain into the ERM. I said at the time that membership was no soft option. The soft option, the devaluer's option, the inflationary option, that would in my opinion be a betrayal of Britain's future.

The right hon. Gentleman is afraid of an election is he? Oh, if I were going to cut and run I'd have gone after the Falklands. Afraid? Frightened? Frit? Couldn't take it? Couldn't stand it? Right now inflation is lower than it has been for thirteen years, a record the right hon. Gentleman couldn't begin to touch!

The universe would have expanded in a smooth way from a single point. As it expanded, it would have borrowed energy from the gravitational field, to create matter. As any economist could have predicted, the result of all that borrowing, was inflation. The universe expanded and borrowed at an ever-increasing rate. Fortunately, the debt of gravitational energy will not have to be repaid until the end of the universe.

The [pay] policy is principally designed to hold down wages rather than to check inflation. Inflation is being used as an excuse to destroy free trade union bargaining.

The stock of money, prices and output was decidedly more unstable after the establishment of the Reserve System than before. The most dramatic period of instability in output was, of course, the period between the two wars, which includes the severe (monetary) contractions of 1920-1, 1929-33, and 1937-8. No other 20 year period in American history contains as many as three such severe contractions. This evidence persuades me that at least a third of the price rise during and just after World War I is attributable to the establishment of the Federal Reserve System... and that the severity of each of the major contractions - 1920-1, 1929-33 and 1937-8 is directly attributable to acts of commission and omission by the Reserve authorities... Any system which gives so much power and so much discretion to a few men, [so] that mistakes - excusable or not - can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic - this is the key political argument against an independent central bank... To paraphrase Clemenceau, money is much too serious a matter to be left to the central bankers.

The IRS sent back my tax return saying I owed $800. I said, 'If you'll notice, I sent a paper clip with my return. Given what you've been paying for things lately, that should more than make up the difference.'

Our inflation, our public enemy number one, will, unless whipped, destroy our country, our homes, our liberties, our property and finally our national pride as surely as will a well-armed wartime enemy.

The acid test of monetary policy is its record in reducing inflation. Those who wish to join the debate about the intricacies of different measures of money and the implications they may have for the future are welcome to do so. But at the end of the day the position is clear and unambiguous. The inflation rate is judge and jury.

We had to dispel the notion that the way to economic success lies through a sort of fiscal levitation. That was the abiding post-war delusion-that governments could spend and borrow their way to prosperity, and fine-tune the performance of the economy through something known pretentiously as demand management...It used to be an establishment nostrum that you need a budget deficit to get economic growth. That was the belief which lay behind the notorious letter by 364 economists in March 1981. We have given the lie to that, decisively. There can no longer be any argument about it. Everyone-or almost everyone-now accepts that the proper role of macro-economic policy is to keep downward pressure on inflation and to maintain a stable framework in which the private sector can expand.

The fears of recession in the aftermath of Black Monday have turned to fears of the economy racing ahead too fast, with inflation edging up and a substantial current account deficit...people understandably feel more confident about their future than they've done for decades, but as a result they have been borrowing more and saving less...coming on top of a massive income investment boom, it's all been just a bit too much of a good thing.

[Australian Reserve Bank] Governor MacFarlane said recently when Paul Volcker broke the back of American inflation it's regarded as the policy triumph of the Western world. When I broke the back of Australian inflation they say, 'Oh, you're the fellow that put the interest rates up.' Am I not the same fellow that gave them the 15 years of good growth and high wealth that came from it?

$100 placed at 7 percent interest compounded quarterly for 200 years will increase to more than $100,000,000 - by which time it will be worth nothing.

A paper monetary standard means there are no restraints on the printing press or on federal deficits. In 1971, M3 was $776 billion; today it stands at $8.9 trillion, an 1100% increase. Our national debt in 1971 was $408 billion; today it stands at $6.8 trillion, a 1600% increase. Since that time, our dollar has lost almost 80% of its purchasing power. Common sense tells us that this process is not sustainable and something has to give. So far, no one in Washington seems interested.

Ron Paul: ...you have to develop the transition, and eventually the next step would be to prohibit the Fed from monetizing debt. This is the real evil. The politicians spend for war, welfare, and they don't have to do it responsibly. Question: When you say monetize the debt, you mean they would only be able to spend the cash that they had on hand. They couldn't write any cheques for which they don't have in their account any money? Ron Paul: That's right. And that is the key to it. Because when the Fed comes along, and there's starvation for capital and liquidity, and politicians are spending too much, the Fed can create 20, 30, 50 billion dollars in a day, just like they did trying to bail out this housing bubble crash. So they create money out of thin air endlessly, eventually that has to stop because that drives the value of the dollar down.

When Ron Paul said inflation was the hidden tax, I yelled at the screen, 'He's right! Follow up: This is a key comment!' Instead the moderator, other candidates, and the crowd just stared at him and probably just wanted a baked potato with their cheese burger.

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

Ron Paul: What's happening is, there's transfer of wealth from the poor and the middle class to the wealthy. This comes about because of the monetary system that we have. When you inflate a currency or destroy a currency, the middle class gets wiped out. So the people who get to use the money first which is created by the Federal Reserve system benefit. So the money gravitates to the banks and to Wall Street. That's why you have more billionaires than ever before. Today, this country is in the middle of a recession for a lot of people... As long as we live beyond our means we are destined to live beneath our means. And we have lived beyond our means because we are financing a foreign policy that is so extravagant and beyond what we can control, as well as the spending here at home. And we're depending on the creation of money out of thin air, which is nothing more than debasement of the currency. It's counterfeit... So, if you want a healthy economy, you have to study monetary theory and figure out why it is that we're suffering. And everybody doesn't suffer equally, or this wouldn't be so bad. It's always the poor people -- those who are on retired incomes -- that suffer the most. But the politicians and those who get to use the money first, like the military industrial complex, they make a lot of money and they benefit from it. John McCain: Everybody is paying taxes and wealth creates wealth. And the fact is that I would commend to your reading, Ron, 'Wealth of Nations,' because that's what this is all about. A vibrant economy creates wealth. People pay taxes. Revenues are at an all time high.

I don't mean this to be political, but when Ron Paul was firing every revolver in Ben Bernanke's direction, there were a lot of people cheering down here, with regard to the only tools the Fed ever seems to use, are the easing tools. And on the inflation front, many traders were reading the subtitles and they went back and checked, with respect to the weaker dollar, it affects import prices but not domestic prices, that's kind of an inconsistency [...] I just think you don't understand the way traders think. Traders don't care about your analysis. They care about making money. And they obviously realize that the only thing the Fed has ever done to solve these problems is to ease, and they're making money. But if you ask these people, do you think you really gonna see a rate cut in December, half the people I talk to say by time we get into December, headline inflation would probably make it so the Fed can't ease.

Question: You wanna gut that safety net... Ron Paul: But the safety net doesn't work. Question: Tell me why it doesn't work. Ron Paul: It does work for some people, but overall it ultimately fails, because you spend more money than you have, and then you borrow to the hilt. Now we have to borrow $800 billion a year just to keep the safety net going. It's going to collapse when the dollar collapses, you can't even fight the war without this borrowing. And when the dollar collapses, you can't take care of the elderly of today. They're losing ground. Their cost of living is going up about 10%, even though the government denies it, we give them a 2% cost of living increase. Question: So do you think the gold standard would fix that? Ron Paul: The gold standard would keep you from printing money and destroying the middle class. Every country where you have runaway inflation, there's no middle class. Mexico, there's no middle class, you have a huge poor class, and a lot of wealthy people. Today we have a growing poor class, and we have more billionaires than ever before. So we're moving into third world status... Question: Who is the safety net that you're speaking of, who does benefit from all those programs and all those agencies? Ron Paul: Everybody on a short term benefits for a time. If you build a tenement house by the government, for about 15 or 20 years somebody might live there, but you don't measure who paid for it: somebody lost their job down the road, somebody had inflation, somebody else suffered. But then the tenement house falls down after about 20 years because it's not privately owned, so everybody eventually suffers. But the immediate victims aren't identifiable, because you don't know who lost the job, and who had the inflation, the victims are invisible. The few people who benefit, who get some help from government, everyone sees, 'oh! look what we did!', but they never say instead of what, what did we lose. And unless you ask that question, we'll go into bankruptcy, we're in the early stages of it, the dollar is going down, our standard of living is going down, and we're hurting the very people that so many people wanna help, especially the liberals...