Summary of How Inflation Precipitates Societal Collapse

00:00:00 - 00:10:00

In the video, Ludwig von Mises discusses how inflation leads to price inflation and societal collapse. He states that central banks are inflating our money supplies at rates that could bring about the collapse of our economy and pull-down civilization with it. The author applies this lesson to modern day events, such as the 2008 financial crisis.

• 00:00:00 In this video, Ludwig von Mises discusses how inflation leads to price inflation and societal collapse. The philosopher George Santayana stated that those who cannot remember the past are condemned to repeat it. Central banks are inflating our money supplies at rates that could bring about the collapse of our economy and pull-down civilization with it. The ancient Roman State took advantage of the delay between the debasement of the denarius and the market’s realization of its diminished value by paying its debts and expenses with newly minted and debased coins, at prices that did not reflect the true value of the currency. This policy of monetary inflation is the modern equivalent of the expansion of the supply of paper, or digital, money. During a monetary inflation the newly created money does not enter the economy in a uniform manner. It tends to first enter the economy through the hands of the politically connected. As these people and institutions are able to spend the newly created money before the monetary inflation drives up prices, they benefit from the inflation.
• 00:05:00 Inflation is a decrease in the value of money, which results in an increase in the amount of money in circulation. This increase in the supply of money often leads to an increase in prices, which can create social and economic problems.
• 00:10:00 The author discusses the effects of inflation on society, and how it can lead to a collapse of the government and economy. This lesson can be applied to modern day events, such as the 2008 financial crisis.