Rising Prices Aren’t Intrinsic to the Currency

It is the same with money. The prevailing paradigm—the dollar-centric view—is akin to the Medieval geocentric view. This view is characterized by two premises. One, the dollar is money. And two, the value of money is not defined in terms of gold (which is believed to be just a commodity like oil or wheat). The value of money is defined as the inverse of the general price level. This means: what you can buy is intrinsic to the currency.

We can see this point in action, in almost any article about Venezuela. Nicolás Maduro, their corrupt and inept dictator, has destroyed production of just about everything. And he has rendered it impossible to import or distribute what little they still have. Consumer goods are truly scarce, so of course prices are skyrocketing. But people call this inflation or hyperinflation.

They accept that what you can buy is a property of the currency itself, missing that in Venezuela you can’t buy anything anymore, because of the socialist dictatorship.

Everyone knows that the dollar loses value. The Federal Reserve’s*target*is to make the dollar lose 2 percent per annum. The dollar goes down, and this is not a bug but a feature.