Forums: Discussions for entrepreneurs and small business.

Cornish hens used to be 50-cents apiece! Now they`re sold by the pound, and end up around $6.50 each! I wanna be paid in gold sovereigns!

As the debate shows, inflation has a definition and people do not really use the definition. People like to think in terms of prices and not in the buying power of the currency.

Inflation is a monetary condition. The cash is worth less.

Prices can go up even when the currency`s value is stable. That is what happens when there is more demand than supply (crop failure, rising needs, drinking water in the desert and not enough to go around). You can have inflation even with a rising supply if the government is choosing to issue more fiat money or to allow the reserve requirement to be reduced.

So, the masses do not understand inflation and they clearly do not think about it when they vote. People react to prices.