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- True Money Supply is the Correct Measure of Inflation, Not Consumer Price Index
True Money Supply is the Correct Measure of Inflation, Not Consumer Price Index
by Andrew Moran Mises.org
Historically, inflation always referred to an increase in the money supply, whereas nowadays it refers to an increase in prices.
This shift in the definition of inflation lets central banks get away with their fraudulent business. Thus, the original definition must be reestablished. We must, by all means, switch the focus from the symptoms to the disease.
The CPI Deserves Less Attention
The lure of the Consumer Price Index (CPI) doesn’t just undermine price inflation, but also camouflages monetary inflation. Everywhere in the media and academic circles CPI is used as the main measure of “inflation.” Along with this index, “experts” sometimes talk about producer price indexes and personal consumption expenditures.