by Matthew Scott

Created on: June 04, 2008

Inflation exists and its very existence is demonstratively inhibitive. While some sophistry may be implemented with the effect of allaying or misdirecting our concerns related to the greatest and most usurping of taxes, the truth is that inflation is a real and problematic presence in all of our lives. Rather than view inflation as some abstract, arcane theory that is inevitable anyway, we must recognize that this subject is a rather easy and rewarding one to explore and is something to which we should endeavor to affect in accordance to our objectives and interests. Again, inflation, for all intents and purposes, is a tax; in fact, it is largely hidden and comprehension related to its effects is largely restricted to very few people. Let us explore.

First, in order to comprehend and appreciate the validity of positing that inflation is a tax, let us examine money. Money did not always exist. In fact, at one point in time, most of human kind was nomadic and little cooperation was to be had; essentially, human beings had to be self-reliant. Over time, human beings recognized the value in cooperation, so society and its myriad of groups of people formed. Among many attributes, such cooperation brought about trade of goods and services derived from the labor and machinations of peoples. The first form of trade, friend, was barter, or the immediate and direct exchange of goods and or services. While this was of considerable benefit, as one can see, barter is rather inefficient. At some point in time, some clever human beings decided, then, in order to better facilitate and expedite trade and therefore induce greater value and less cost associated with it, a placebo was invented: money. I said it! Money is a placebo; money is not of inherent worthnothing but trust secures the recompense of ones labor that brings into possession such inherently worthless articles as the Federal Reserve Note, or the U.S. dollar.

Money, we must understand, stands in place of the consummation of an exchange. A barber that provides a hair cut service for $16 does so not to bring into possession the quantity of money in of itself; no, rather, the barber provides services so as gain the ability to satisfy his or her demands or desires. While in this example the customer gains what he or she desires in the present, the barber does not. The transaction does not truly consummate until the money that has been provided in lieu of actual product or service has been exchanged by the barber him

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