When the dollar was defined as a specific mass of gold, the prices of goods tended to fall slightly each year, which is what you would expect with productivity gains.
With inflation you lose not only the nominal inflation rate, but also the wealth-enhancing effects of those productivity gains. "That which is seen, and that which is not seen."
The use of coercion, including war, forced devaluation, asset seizure, and forced centralization of financial services, results in wild price inflation, volatility, bubbles, and crashes. This is because coercion moves wealth to its least productive use and hampers the discovery of true prices.
For another example of increased price volatility, see this 200 year chart of the Dow/Gold ratio:
Note well that you're looking at a logarithmic chart there, so the wild swings you see after about 1920 or so represent actual, sickening, and deadly phenomena and are not just optical illusions.
http://nothirdsolution.com/wp/wp-content/uploads/2008/07/cpi...
When the dollar was defined as a specific mass of gold, the prices of goods tended to fall slightly each year, which is what you would expect with productivity gains.
With inflation you lose not only the nominal inflation rate, but also the wealth-enhancing effects of those productivity gains. "That which is seen, and that which is not seen."
The use of coercion, including war, forced devaluation, asset seizure, and forced centralization of financial services, results in wild price inflation, volatility, bubbles, and crashes. This is because coercion moves wealth to its least productive use and hampers the discovery of true prices.
For another example of increased price volatility, see this 200 year chart of the Dow/Gold ratio:
http://www.sharelynx.com/chartstemp/DowGoldRatio.php
Note well that you're looking at a logarithmic chart there, so the wild swings you see after about 1920 or so represent actual, sickening, and deadly phenomena and are not just optical illusions.