Registered: Jan 2010
07-12-12 01:06 AM
Stardust, thank you for the thoughtful reply. I am glad I made you think about things. There is much we could talk about with regard to interest. In a way, not exactly...but in a way, you could say that it is the interest that causes the inflation. However, the interest is not the cause; it is a result of capital flowing out of financial assets and into tangible assets that can be leveraged. The interest rises in a self reinforcing system of increasing leverage ratios and increasing asset values...interest is always high when you have real inflation.
I am pleased that you realize that inflation is an invisilbe un-legislated tax...especially in a progressive tax structure...and it taxes the poor and the middle class the most....but maybe more on this another time.