Indexing for inflation, a $1 Federal Reserve note issued in 1940 is worth only about 2 cents today. Inflation is often confused with economic issues totally unrelated to what actually causes inflation, such as manufacturer supply vs. consumer demand. Supply and demand are what a true "free-market economy" is all about.

Inflation is also frequently thought to be the devaluation of the currency, caused by increasing the money supply without actually increasing the wealth in the system. We have already established that the system is not based upon wealth, but debt. If the paper currency supply has $400 billion of FRNs in circulation, and the Fed decides to issue another $400 billion into circulation, the paper money supply has just increased 100 percent, and in theory, so has inflation, and the existing currency in circulation has just decreased in value by 50 percent.

Inflation is the inevitable result of a debauched currency, debt money system and the interest charged by banks for loans of this debt money. Inflation does not occur with a currency of wealth such as gold and silver. The value of a money supply based on wealth and substance is very stable. If you take away the debt money creation power of the Federal Reserve System, you eliminate inflation. Dr. Ron Paul is right. Abolish the Federal Reserve System.

Marcel LeRoi

Belgrade