Inflation
Imagine you are on an aircraft carrier with 4000 sailors on board. Each sailor gets issued 3 ration tickets every day by the paymaster. The sailor can then get a meal in one of the ship messhalls. The paymaster realizes he can issue an extra ticket to himself every day and get 4 meals. Nobody will notice. After a while the other officers begin to notice the paymaster is eating 4 times a day. He issues them with 4 tickets each day to keep them quiet. Eventually even the Captain is in on the deal. Meanwhile the chef has noticed that his stores are being depleted too fast. He is forced to cut the amount of food in each meal because the total amount has already been budgeted. As more people join the group getting 4 tickets a day the normal ration size has to get smaller.
Soon the ordinary sailors get annoyed by the small portions since they only get 3 tickets a day. The Captain orders the paymaster to give everyone 4 tickets a day since this is the easiest way to solve the problem. After a few days the paymaster starts the cycle again by giving himself 5 tickets a day. I am not going to follow that process any further. But we can analyze what happened in the first cycle. When only a few privileged people were getting 4 tickets a day, they received more than their fair share. Everyone else received less. Once everyone got 4 tickets, there was an equal share for all. However the ordinary sailors still got cheated. Also they will be cheated again when the new 5 ticket scam starts operating.
This is a description of inflation that clearly shows that the politicians and their friends benefit from inflation because they are effectively stealing from the ordinary people. Of course a real monetary inflation process is much more complicated but the general scam is the same.
[What do you think of this as a very basic introduction to inflation?]
Soon the ordinary sailors get annoyed by the small portions since they only get 3 tickets a day. The Captain orders the paymaster to give everyone 4 tickets a day since this is the easiest way to solve the problem. After a few days the paymaster starts the cycle again by giving himself 5 tickets a day. I am not going to follow that process any further. But we can analyze what happened in the first cycle. When only a few privileged people were getting 4 tickets a day, they received more than their fair share. Everyone else received less. Once everyone got 4 tickets, there was an equal share for all. However the ordinary sailors still got cheated. Also they will be cheated again when the new 5 ticket scam starts operating.
This is a description of inflation that clearly shows that the politicians and their friends benefit from inflation because they are effectively stealing from the ordinary people. Of course a real monetary inflation process is much more complicated but the general scam is the same.
[What do you think of this as a very basic introduction to inflation?]