Final Word from Thursday, January 22, 2009
Barack Obama acknowledged in a recent interview that printing money to pay for a trillion-dollar U.S. government rescue package might lead to inflation. There was a time, many years ago, when just such an increase in the money supply was, by very definition, "inflation." New dictionaries and textbooks, though, define "inflation" as being a general rise in prices. It's this language trickery that allows us to have both inflation (more banknotes in circulation) and deflation (falling prices) at the same time. Those who want to make sense of this should probably look at the current decline in consumer prices not as deflation, but simply as supply and demand at work. Czech consumers are buying less, so prices are falling (or rising more slowly). Obama-style inflation (many more bills in circulation) would only become an issue if the Topolánek government decided to ratchet up its spending and borrowing.[Czech Republic CPI United States of America]
Glossary of difficult words
money supply - the total amount of money in circulation or in existence in a country (with several more-technical definitions);
trickery - a cunning or skillful act or scheme intended to deceive or outwit someone;
supply and demand - the amount of a good or service available and the desire of buyers for it, considered as factors regulating its price;
bill - banknote;
to ratchet up/down something - to cause something to rise/fall as a step in what is perceived as a steady and irreversible process.