As a child of the 1970s and 80s many of my memories are around inflation. Prices always rising, Mrs. Thatcher banging on about killing inflation. Germany being held up as model economy for its fiscal prudence. We were the sick man of Europe and by 1990 we were the leader. One of the key reasons, we were told, was that inflation was under control. So many of my generation fear inflation, it is a byword for our weakness and poor international standing. Worse still was the hyper inflation the ravaged Germany and fostered the rise of the Nazi party or, indeed, led Argentina to war with the UK.
So now as I watch a battle for resources, labour, fuel, raw materials etc., I see the spectre of inflation. Of course I am no economist, so my fear are based in experiance and gut reaction. Not always the best guide!
So I have been hunting for more learned sources and thought this article is interesting and worth sharing.
What do you think? What are you hopes and fears for inflation?
“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 1970