In this final video in a mini-series on how money has got its value in the fifty years since the final link between money and gold was broken I look at the issue that is always raised whenever it is pointed out that a government is free to create any amount of money it wishes, which is inflation.
Much of the video explains why hyperinflation of the sort seen in Weimar Germany, Zimbabwe and Venezuela happens, and why it is incredibly rare.
Then I explain how a government has to manage inflation, not on the basis of balancing its books, but on the basis of balancing its economy around the economic plans it has for it, and why this is possible.
There is nothing to fear about government-created money. It does, in fact, liberate us to deliver the economy we need. We just need to understand how. This video seeks to demystify that process.