"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens…. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."John Maynard Keynes
I am not a Keynsian but can anyone dispute the above?
Thanks to Guido Fawkes for the spot.
1 comment:
This essentially assumes the largely closed economy that existed in Keynes time. The reality is that a lot of our national wealth is mobile and can move offshore if it is not already offshore (e.g. invested in shares in multinational corporations that invest overseas).
People who already have productive investments may benefit, particularly if they are financed by long term debt, because the value of their assets will increase in relation to money while the value of their liabilities will reduce relative to the value of their assets.
What the government does do is effectively wreck the domestic economy by making domestic investment uneconomic or excessively risky and wipes the value of savings held in monetary form (cash, deposits or bonds) by the middle classes who are less able/willing to move their money out of the country.
Post a Comment