Quoth the Raven
· QTR’s Fringe Finance
· June 04, 2026 at 13:00
· ⏱ 10 min read
| Read on Substack ↗
Summary
The article argues that the true cause of inflation is government money printing, not supply shocks, and that by redefining inflation to focus on core or trimmed price indexes, policymakers like new Fed Chair Kevin Warsh are ignoring real price increases from government interventions and wars. This obfuscation allows them to justify further monetary expansion, which will worsen the cost of living for Americans.
•Originally 'inflation' meant an increase in the money supply, but was redefined to mean a general rise in prices to obscure the role of government money printing.
•Economists like Mises and Rothbard argued that a general price level is immeasurable because value is subjective and prices are exchange ratios between money and specific goods at specific times.
•Price indexes like CPI and PCE rely on arbitrary choices about goods included, weights, quality adjustments, and when to add or drop items.
•Core inflation excludes volatile food and energy prices; trimmed mean inflation excludes extreme price movements on both ends, which Warsh advocated for.
•The article claims that a general rise in prices is impossible without an increase in the money supply—supply shocks alone cause relative price shifts, not across-the-board inflation.
•Recent price increases from the Iran war closure of the Strait of Hormuz, pandemic lockdowns, and decades of government intervention in housing, education, energy, and healthcare are not 'inflation' in the strict sense but cause real pain, and focusing on trimmed indexes ignores this pain.