But Then Finally the Masses Wake Up
Elon Musk retweeted an except of Milton Friedman speaking at the University of San Diego & San Diego Chamber of Commerce in 1978.[1]
Friedman says that deficit financing is done either by borrowing from the public or by printing money, that inflation is a tax.
Musk has been tweeting about the spending bill and inflation a bunch since yesterday. This may be the tipping point where people find out why things are getting expensive. Thank God he bought twitter.
To quote Ludwig von Mises in Human Action, [2]
“But then finally the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Every- body is anxious to swap his money against ‘real’ goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.
It was this that happened with the Continental currency in America in 1781, with the French mandats teuitoriaux in 1796, and with the German Mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last forever.”
[1]The full video can be found here: Milton Friedman Speaks: Money and Inflation (B1230) - Full Video - YouTube
[2]Human Action: The Scholars Edition Human Action, chapter XVII. Indirect Exchange, part 8. The Anticipation of Expected Changes in Purchasing Power.
