10 cent / gal gasoline?
Thursday, May 11th, 2006George Reisman writes about Gasoline at 10 Cents a Gallon and Falling, giving an example of the relative effects of inflation. (Hat tip, Luskin)
Luskin notes inflation isn’t rising prices, but a declining dollar. I would add that inflation is literally inflation of the money supply, which dilutes the overall purchasing power fo the currency in that supply, which makes the individual units worth less.
One of the paleos over at Mises.org once illustrated this by noting that a $20 gold dollar would buy you a custom tailored suit 100 years ago. The value of that same weight of gold today will buy you a custom tailored suit as well!
(Note to self: convert paper money to something less prone to devaluation as soon as you get it)