Milton Friedman on Inflation

“No government willingly accepts the responsibility for producing inflation even in moderate degree, let alone at hyper-inflationary rates. Government officials always find some excuse – greedy businessmen, grasping trade unions, spendthrift consumers, Arab Sheikhs, bad weather, or anything else that sounds remotely plausible….”

“Any of these can produce high prices for individual items; they cannot produce rising prices for goods in general. They can cause temporary ups and downs in the rate of inflation. But they cannot produce continuing inflation, for a very simple reason: not one of the alleged culprits possesses a printing press on which it can legally turn out those pieces of paper we carry in our pockets and call money; none can legally authorize a book-keeper to to make entries on ledgers that are the equivalent of those pieces of paper.”

“In the modern world, inflation is a printing press phenomenon. The recognition that substantial inflation is always and everywhere a monetary problem is only the beginning of an understanding of the cause and cure of inflation. The more basic questions are: Why do governments increase the quantity of money too rapidly? Why do they produce inflation when they understand its potential for harm?”