Inflation, Economics Dung Beetle - Hammersmith Local Group

The life cycle of the dung beetle may not be the subject of polite conversation but without them and their ilk we would be wading mountains of poo. Similarly inflation is deeply unloved and to many a villain, eating at the value of their saving but without it we would be wading through mountains of cash. That may sound like a positive but we can see the consequences of low inflation today in our own economy, a bloated property and asset market that only really benefits the asset rich.

To understand why inflation is one of the good guys rather than a villain we need to redefine inflation, from the well-worn statement of ' the relationship between the supply of goods and services and the money supply' to 'the balance between money and the real wealth that it represents' The difference may appear minor but the latter take account of all wealth rather than that that newly created. This requires an explanation of what real wealth and a part of the talk will focus on defining what real wealth is and how to measure it. With this tool and the Positive Money understanding of money creation we can truly analyse inflation.

The essence of the argument is that real wealth wears out or decays etc. whereas once new money is created it lasts forever. Following on from my talk on Interest created money there are some other interesting concepts such as junk money - in the same context of junk food, and mortgage lending being the principle cause of core inflation.

The talk will be given by Artie Lees, an engineer in the utilities sector.

As usual we welcome everyone, first timers and regulars alike. The talk will be followed by a discussion and your participation is encouraged!