Inflation and wealth

  Businesses chase after inflation because inflation produces opportunity. In addition it is much easier to pay back a loan when inflation is introduced to the market. Gold miners would not have incentive to produce more gold if the price of gold was not increasing. Milk producers would not have more incentive to produce more milk if milk prices were not increasing. Grain producers would not have more incentive to produce more grain if grain prices were not increasing. Greater demand leads to greater supply and inflation creates that illusion that there is greater demand.

 It is the same psychological application used to force greyhounds to run race tracks.

 In fact, if prices actually fell, so would real wealth. Deflation has a destructive effect on people's willingness to produce. Businesses would cut back on production just to manipulate prices to increase. By creating scarcity, and destroying production, they are hoping to push prices back to higher levels. Without higher prices, there is just no justification to keep productivity at previous levels.

790,000 gallons of fresh milk dumped
Farmers in white heat over milk prices
Updated: Wednesday, 16 Sep 2009, 12:01 PM EDT
BRUSSELS (AP) – Belgian farmers sprayed 3 million liters (790,000 gallons) of fresh milk onto their fields Wednesday, furious over the low milk prices they say are bankrupting farmers.
Milk farmers’ groups said world prices had sunk so much they are having to sell milk at half their production costs, leaving more and more farmers unable to pay their bills.


January 23, 2010 

 Sometime before early afternoon on Thursday, Dean Pierson, a 59-year-old, second-generation dairy farmer, took a rifle and shot to death his 51 milking Holsteins, State Police said. He selected only the ones that had to be milked twice a day to prevent painful complications from setting in.

Pierson left unscathed some 50 other cows, the young stock, heifers and calves that don’t need to be milked and require less care.

And then, alone in the dairy barn where he arrived each morning before sunrise and finished up the day’s second milking long after sunset, Pierson turned the weapon on himself.