> Well, in today's world it is. Yes, not according to your 'old-school' definition of it. But if anyone says "inflation" today - it means price increases. Nothing more, nothing less.

Apparently you are correct. The vast majority of people hear the term and think of price increases. As I noted earlier, the definition has changed. I gather most of my economic understanding from Austrian School economists which when referring to inflation usually mean increase in the money supply.

> Care to explain?

> Yes, I meant a recession. Please, once again, elaborate what you mean by "artificially inflated prices"?

When a recession happens there is a decrease in demand for products and services. This drop in demand causes an increase in supply of those same products and services. The increase in supply causes prices to fall. When the government releases more cash into the market, the supply of cash is increased. When people have a larger supply of cash, they can pay more for goods and services. If the cash infusion is at a certain level, prices may not increase nominally(compared to before a recession) because the increased supply of money prevented their drop. The term artificial refers the fact that the money supply is increased or decreased by government fiat. Hence, the prices are increased or decreased by government fiat. Government involvement in the market is artificial. Markets exist without government and with governments. When a business or person is making decisions based on market dynamics and a government steps in to alter the dynamics, that is artificial, because it is produced by a political agency. It is not a natural quality of the market.

> Ehh, ok. So what happens to those people when companies start making less money?

When these people and companies make less money, that is offset by the decreased price of goods and services. Companies pay less for material because demand has gone down, this allows them to continue to employ people and be competitive and profitable. There will be temporary imbalances of course, which will result in job losses and business closures.

> Care to explain how resources are "misallocated"?

> Money printing only serves to exacerbate and extend the misallocation.

Misallocation refers to capital that was directed to unprofitable sectors of industry at a macro and micro scale. Assume for a minute that government is not involved in the market at all. When businesses compete, they make different decisions on how many people to hire, equipment purchases, material acquisition, debt level, and many other things. They have decided where to "allocate" these resources(labor, capital). When one company makes a bad decision this can lead to less profit and eventually the failure of the business. If enough businesses make these bad decisions, a large portion of the resources have been "allocated" to sectors or markets that are unprofitable. They may survive for a time before one starts failing, then another, and another. This is what causes a recession in a market that is not influenced by government. As the recession progresses to the end, there are less businesses competing that have "misallocated" their resources.

When governments print money and allow business unfettered access to this money via low interest rates, companies take advantage of it. Because they have more money than their competitor they can pay more money for materials, labor, equipment. They can lower prices of their goods or services to temporarily out compete their competitors. When other businesses see what is going on, they secure more of the cheap debt as well. For a time, the businesses that make poor decisions(paying too much for labor/materials/equipment) can still compete because they have not ran out of cash. When the loan balance becomes too high, we reach a scenario where businesses start cutting back to pay the interest and principle. They start increasing product prices, cut labor, sell equipment. Due to the fact that the government has increased the amount of money available to these companies beyond what they normally would have, the government increased the amount of "misalloctated" resources. Coupled with companies en masse gathering debt to stay competetive, this results in a larger recession, because a larger percent of the market is based on capital that was acquired through fiat rather than competition. Companies and individuals enter this new recession with larger balances and larger portions of their cash balance is subject to interest payments. This means the selloff of equipment must be larger, labor cuts must be larger, and material acquisition costs must be reduced to a greater extent. This results in a greater recession or depression. The money printing exacerbated and extended the misallocation.

> No, America left it because it was a shit system. Capitalism is inherently monetary. Having a currency pegged hinders growth and only serves to avoid inflation for the rich.

Please explain. How does pegged(commodity) dollar hinder growth, given the history of the US dollar peg and substantial economic growth? Avoids inflation for the rich?