their goods and services. People didn’t like this, and some historians believe this was a key factor in the decline of royal power and the rise of an aristocratic elite in many countries. There are great historic accounts of the gold standard and management of the money supply around the world, especially in the U.S., but without getting into the details I’ll just say that the U.S. went through many dramatic revisions to the way the money supply was managed before the establishment of the U.S. Federal Reserve Bank in 1914. The gold standard lasted in one form or another until the 1970s and is now completely abolished. With a gold standard in place the way to debase (reduce the value of) the currency was to reduce the quantity of gold that backed a given note. But now, without a gold standard, central banks around the world can effectively just print more money when they want to. This is exactly what happened in late 2008 and throughout 2009 as the U.S. Federal Reserve and other central banks ‘printed’ more money to maintain the liquidity of the major finanical institutions around the world. When central banks increase the supply of money, they reduce the value of money, so that each bill is worth less than it was before. The effects of this reduction in purchasing power aren’t seen immediately, especially during a financial crisis and its aftermath when asset prices are generally still falling or flat and banks are not increasing their lending to businesses and consumers. However, the effects do show up when the economy stabilizes and starts to grow again. We call a reduction in the purchasing power of a dollar ‘inflation’. Inflation may show up in various ways. High income earners and/or those with significant wealth,