Let there be no doubt that our present rate of inflation is the main cause of our economic difficulties. There never has been a more mistaken piece of economic analysis than the view that we should accept inflation to avoid unemployment. Inflation today, so far from being an alternative to unemployment, is its main cause. If our rate of cost increase is allowed to continue close to twice that of the average for the developed world it will increasingly price us out of world markets. Employers...will have to restrict their activities and still more their labour force in response to mounting and uncontainable wage and salary bills.

Inflation is caused by too much money chasing after too few goods.

Inflation is an increase in the quantity of money without a corresponding increase in the demand for money, i.e., for cash holdings.

Inflation is caused by a continuing surfeit of money; inflation can therefore be controlled or prevented only by striking at the source of money surfeit. It follows that all prices and incomes policies are irrelevant and futile, whether they are voluntary or compulsory. If the surfeit of money continues, then all prices and incomes must rise accordingly.

Inflation may be defined as any increase in the economy's supply of money not consisting of an increase in the stock of the money metal.

Inflation is taxation without representation.

It would be hard nowadays to find a practitioner who upon being pressed did not confess to two main propositions: the disease of inflation in its modern form is caused by an exorbitant increase in money; and, secondly, that increase is caused by governments borrowing from the banking system in order to cover excess public expenditure.

Five simple truths embody most of what we know about inflation: Inflation is a monetary phenomenon arising from a more rapid increase in the quantity of money than in output (though, of course, the reasons for the increase in money may be various). In today’s world government determines — or can determine — the quantity of money. There is only one cure for inflation: a slower rate of increase in the quantity of money. It takes time — measured in years, not months — for inflation to develop; it takes time for inflation to be cured. Unpleasant side effects of the cure are unavoidable.

Even a relatively mild inflation distorts the structure of production. It leads to the overexpansion of some industries at the expense of others. This involves a misapplication and waste of capital. When the inflation collapses, or is brought to a halt, the misdirected capital investment — whether in the form of machines, factories or office buildings — cannot yield an adequate return and loses the greater part of its value.

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.

Today, of course, our current inflation problem is firmly rooted in the irresponsible monetary policies of maestro Greenspan.

Inflation is a simple idea: imagine that the universe begins in a tiny patch of space dominated by the potential energy of some scalar field, a kind of super-dense dark energy. This causes that patch to expand at a terrifically accelerated rate, smoothing out the density and diluting away any unwanted relics. Eventually the scalar field decays into ordinary matter and radiation, reheating the universe into a conventional Big Bang state, after which things proceed as normal.

What is it that happens in an inflation? The unit of money suddenly loses its identity. The crowd it is part of starts growing and, the larger it becomes, the smaller becomes the worth of each unit. The millions one always wanted are suddenly there in one's hand, but they are no longer millions in fact, but only in name.

One reason inflation is so destructive is because some people benefit greatly while other people suffer; society is divided into winners and losers. The winners regard the good things that happen to them as the natural result of their own foresight, prudence, and initiative. They regard the bad things, the rise in the prices of the things they buy, as produced by forces outside their control. Almost everyone will say that he is against inflation; what he generally means is that he is against the bad things that have happened to him.