In a message dated 3/8/00 11:59:45 PM !!!First Boot!!!, jformsma@dixie-net.com writes: << I thought inflation was the result of excess paper money which devalues the currency unit. >> Inflation is where people have to more for what they used to pay, for what ever the reason. If gasoline costs more, then the cost of bring goods and services to the consumer will increase. Because everyone has to pay more for products and services, employees will ask for more money to pay for them. This will also add to the costs of goods and services. And the cycle continues. One of the reasons we have had such a long and prosperous low inflation period, is because no one was asking for more money, because all goods and services were kept relatively in check. But now that the OPEC nations have increased the cost of oil, it will have a ripple effect. I just heard Clinton has asked the OPEC nations to reduce the oil prices, and they have consented. But by the time the actual costs will come to the gas stations, it will be late summer. By that time, however, the damage might have been done, (inflation), Unless, the governments steps in and loosens the money supply. Wim
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