Money Banking & Financial Markets

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Will Inflation Undermine a Country’s Financial System and eventually Ruin the Nation?

Will Inflation Undermine a Country’s Financial System and eventually ruin the Nation?

As with all things the answer to the question: “Will Inflation Undermine a Country’s Financial System and eventually ruin the Nation?” is a question of degrees. It is not whether inflation will ruin a nation, but how much inflation will ruin a nation. 0.00001% is still an inflationary number as is 1,000,000%. So it is not just the presence of inflation that will undermine a country’s financial system, but rather to what degree inflation impacts a country’s financial system. The original statement attributed to Vladimir Lenin that prompted this paper cannot be taken as a truism but it certainly fits in the Socialist propaganda.

Will Inflation Undermine a Country’s Financial System and eventually ruin the Nation?
It is easier to accept George Bernard Shaw’s statement: The lack of money is the root of all evil,” (Lawrence S. Ritter, 2009) than it is Lenin’s supposition that inflation, in a sense, is the root of all evil for a nation. To be certain, though, they are linked together. Inflation can lead to a lack of money and if it is bad enough, it can certainly be the ruin of a nation, or perhaps more succinctly: the ruin of a government.
Inflation: how much is too much? This is a very debatable matter of how much is too much. To the uneducated masses, any is too much, and politicians pray on this ignorance for their personal gain. To the greedy there can never be too much. But the truth lies somewhere in between the ignorant and the greedy’s position on this subject. Some inflation is good, it is very good actually. How much is “good” is a point that even the world’s best economic minds cannot agree on and I don’t think we are going to settle that issue here.…...

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