This word is defined by our masters of misdirection (the current economics profession) as a rise in the general price level. But not only is this accepted definition inaccurate, it is, like so many other terms in current "economics", employed to mislead and misdirect. In order for the words inflation and deflation to actually convey useful information to the public these terms must be properly defined as the value of money. Succinctly and undeniably, if labor is the proper measure of value, then the value of all other things is measured in relation to labor. Stated in a different way: So long as the holder of money can command the same amount of labor with his money over time then there has been no inflation or deflation of the currency. It may well be that the owner of money will realize more "goods" from his expenditure of money, or he may realize less actual "goods" at some point in time. But if the amount/price of money/credit is held constant in relation to labor then the holder of money cannot claim that his money gained or lost any actual value in the economy. And he most certainly cannot claim that the monetary authority has "watered down the currency" or unjustly "fiddled" around with the "money supply". In a monetary system where the currency is tied to labor as it should be then the gain or loss in the basket of "goods" that can be commanded by accumulated money or immediate earnings is not a failure of the monetary system.

It must be constantly recalled that inflation is anywhere and everywhere a monetary phenomenon. That inflation is that dimension of prices that can supposedly be controlled by varying the "interest rate" of credit, by varying the amount charged for entrepreneurial "investment" in the provisioning of more "goods", or by creating or extinguishing money. This claim is constantly repeated in that when our masters of misdirection speak of inflation they claim that it is something that can be caused or cured by messing about with interest rates and/or the amount of money in The Economy. Never will you hear the talking heads mention "inflation" without mentioning interest rates or the Federal Reserve. They claim that the cure for inflation is always and everywhere addressed by adjusting the value of money, by adjusting its scarcity, by adjusting interest rates. The self contradictory nature of this position is made obvious by a real world example in which the price of oil rises. Let us say that the price rises because there is an oil embargo or for some other real world reason having nothing to do with the value of dollars or the value of labor. This increase in the price of oil will find its way into every part of the American economy because the American economy is so Dependant on oil as a fuel and a fertilizer. People who "have money" will take it out of their mattresses or their savings accounts and pay the higher prices for all of the goods. To insist that the Federal Reserve raise the price of money (or the reward to money stuffed in a savings account) so as to squelch this general price increase and protect the holders of money from a devaluation of their holdings is to insist that labor eat all of the dislocation caused by the rise in the real price of oil. If interest rates are raised then the bondholders and money owners stay even with the general price rise and enjoy the same opulence as they enjoyed before the increase in prices. The cartel gains what it sough to gain in terms of better purchasing power, and all of the actual productive people in the society get the shaft on the deal. They must all produce more than before for the same amount of wages or profits. As the cost of oil appearing in goods is higher (transportation expenses, etc.) then wages paid to labor must be decreased if the price of the "goods" is to remain constant.

The current definition of this term allows the handmaidens to misrepresent and mislead the American public in regard to the constant erosion of wages and the constant rise in asset prices. The current distorted misrepresentation counts the effects of reduced wages many times over. By counting and recounting the fall in wages, the rise in asset prices are offset and the monetary authority struts about, cackling over his control of the inflation monster. Meanwhile, the price of homes and other assets continues to rise unabated, i.e. the general price level (the trained seal economist definition of inflation) is controlled by the decrease in wages and the subjugation of labor (the 95% of the people not at the top). The result, as born out by statistics on wealth disparity, is that the top 5% of the asset owners become richer and richer as measured in their ability to command and control the labor of the remaining 95%.