Douglas Carswell's Blog

Inflation tax is up

Unsurprisingly, we've had yet another rise in inflation. 

They'll try to tell us it's because of the VAT rise.  Or rising import prices.  Or the wrong kind of weather.  Or some other ad hoc causes.  All balls, of course.  Inflation is rising because there is too much money chasing too few goods.

All that quantitative easing money printing is starting to diminish the value of all the other £'s in the economy.  Including the ones you earn or save.

By devaluing the value of our currency, the government - which owes lots and lots of £'s - is deliberately trying to magic away public debt.  The only problem is that shrinking the size of Sterling denominated public debt also erodes the value of wider society's Sterling denominated private savings.  Inflation is a sort of monetary attack on the Big Society.

Thus far, thus familiar.

But the internet could make the period of high inflation we are entering interesting - and unlike what went before.  Last time there was double digit debauchment of the currency, there was little folk could do to avoid inflation tax.  It was a world of currency controls.  Buying and selling online would have sounded like science fiction.

Today the little platoons can do transactions online.  This creates the possibility of ordinary folk escaping inflation tax.  At the click of a button, you can buy and sell and transact in all manner of currencies.  You can even buy credits from suppliers that are not denominated in Sterling - and which won't lose value as you redeem them.   

Perhaps high inflation + the internet means we're about to see advent of non-state run currencies too?

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