Ralph, and others

Its all about the printing of too many dollars, chasing a finite number of items to buy. If the government had stuck to the constitutional basis of money, prices would not be able to go up: a dollar is defined as one ounce of silver, and twenty dollars is defined as one ounce of gold.

Gold and silver are very difficult to mine, in any significant quantity. Only about 3500 tons of gold, world-wide, are mined every year. If a government is hell-bent on expanding the economy, or fighting wars, or providing health care to everyone, it has to spend a whole bunch more money than it can take in, from taxes.

In our case, the annual federal budget deficit is around one to two trillion dollars a year - every year now. Paper , and now electronic, money, is the only way to go. Clearly there is an upper limit on how high they can raise taxes. It all goes somewhere, and eventually it shows up in the prices of everything: shoes, eggs, milk, guns, automobiles - everything.

Against the barometer of gold, which the constitution sets at 20 dollars an ounce, it now costs about 2,050 for exactly that same ounce of gold. This amounts to an increase in the price by a factor of 100 !!!

Or, to put it another way, the dollar has been devalued by a factor of 100. New S&W revolvers that were $10 back in the day, are now over $1000. That is a factor of 100.

This is a very old phenomenon, going back thousands of years. Back then, money was metal coins. When the government needed more money than it could raise in taxes, it started clipping bits of metal off the coins. Then it would clip more, sometimes by drilling out the center of the coins.

In short, the dollar has been clipped, until today, there is only 1/100th of it left. On average, everything costs about 100 times more that it used to. This is a relentless process, happening slowly each and every year.

This is the process of inflation.

Regards, Mike Priwer