Inflation Series – Inflation Causes Overconsumption.

Inflation: Artificial expansion of the money supply.

What would happen if all of a sudden you had access to as much money as you wanted, as if money grew on trees? Well, if all you could buy were gourmet foods then it would be easy to predict: overconsumption – literally!
The same principle applies when the natural constraints of market prices are distorted, like what happens when the market interest rate that reflects the supply of loanable funds and the demand for loanable funds is overridden by an artificial interest rate.
“Come my little pretty have a bite of this apple!” And then the stupor begins. This enticement by deceitful appearance alters decisions and patterns of decisions in a way that would not occur in an unhampered market. This is the breeding ground of greed and the consequence is an alteration of the ethics of the society.
The shallowness of materialism and its detrimental effects on human culture are the offshoots of the overconsumption stemming from inflation. When you hear the statist apologists say that ‘a little inflation is good’ you can be certain that they are oblivious of both economics and ethics and are like the hooded creature offering the poison apple!

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