Every time I read or watch anything that has to do with the financial markets, I hear about inflation. Inflation is the general increase in the price of goods or services. Therefore, the value of money you currently have will be worth less as inflation increases. Usually, there is a financial regulatory entity that tries to control inflation. In the United States, that entity is the Federal Reserve.
As long as inflation is kept low and stable, then it is actually a good sign for an economy. However, if it gets out of control, there are negative impacts. Inflation masks the true value of products which makes it difficult to assess how much price increases are due to demand. Unstable Inflation also makes it difficult to estimate and model future prices of stocks, bonds, and other investment vehicles because many of the models include inflation. As inflation increases, there is a lot of uncertainty that can slow economic growth.
Well fear no more! I have found the solution to controlling inflation.
The solution is the complete opposite of quantitative easing. Instead of putting money into the economy take money out. One cause to inflation is due to the excess supply of money. Based on the economic theory of supply and demand, decreasing the money supply should increase the value of the money. One easy way of doing this is by destroying cash.
As the Joker demonstrated in The Dark Knight, an easy method of decreasing the money supply is by utilizing gasoline and a cigar. In a way, the Joker can be viewed as an extreme utilitarian.
“It’s not about money. It’s about sending a message.”