Everyone loves an early inflation. The effects at the beginning of inflation are all good. There is steepened money expansion, rising government spending, increased government budget deficits, booming stock markets, and spectacular prosperity, all in the midst of temporary stable prices. Everyone benefits, and no one pays. That is the early part of the cycle. -- From the book Dying of Money by Jens O. Parsson

On the first day of school in the year 2020, excited students file in, sit down, pull out tablets, paper and pen. Most are stylishly dressed, from well-to-do families. The chatter at a high pitch, the room carries an obvious sense of excitement.

For the first time, the university is offering Economics 403, The Great Inflation. The instructor, who had not yet entered the room, was quite notable, world famous in fact. A few years back he had been convicted of orchestrating what had become known as The Great Inflation. As a part of his sentencing agreement, he was to teach classes on the effects of inflation.

Suddenly, as though on cue, the chatter stops and an aged rather tired looking man enters. He's a bit disheveled, overweight, shoulders rolled forward. The top button of his shirt undone, his tie looks like an afterthought. Attempting a smile he says quietly, "Good morning. As many of you know, this is my first day; a court mandate. Bear with me." Some students respond with a Good morning, others stare. "So this is the Fed guy my parents talk about,"a student whispers.

After coughing, clearing his throat, the instructor murmurs, "This is Economics 403. We'll be studying what led up to the Great Inflation; what mistakes were made during this period. Everything," emphasizing the word 'everything,' "needs to be examined in this class; my conviction, the 18% unemployment rate, the riots, and why a new currency was issued. We're going to talk. My mandate from the court is to pass on to you the lessons learned from one of the more difficult periods in American history." He looks out into the classroom, carefully studying each face. So young, he thinks to himself, so young...

"Questions?"

All heads went down, as though they were taking their final exams. Finally one brave soul raises her hand. "Ah... like... like, did you really cause The Great Inflation?" She pauses. Her voice rises in pitch to compensate for her nervousness. "My parents said it was a mess, and it's your fault!" she blurts out. Silence floats through the room like the sound of a feather drifting towards the earth. The students nervously adjust themselves in their seats. As accusatory as the question was, the ice had been broken. The students now felt a certain freedom to ask away.

In an instant the instructor's speech and mannerisms change; his shoulders straighten. "Look," he says forcefully, with a twinge of anger in his voice. He had defended his actions during his court trials, and he would be defending himself now in the classroom. "You're gonna know the truth. But for now, before you start pointing fingers, let's review a few things." Tablets turned on, pens at the ready. He begins his talk.

He looks away, as though trying to choose his words in a way which would be understood. "In 1971, Richard Nixon took us off the gold standard. Up until that point in American history, the dollar was essentially backed by gold." "Why gold?" a student queries. "Well, gold has been considered money for 5000 years. Gold is hard to find and in short supply. But more importantly, gold was, and is, a restrainton the creation of money." He paused for a moment, and repeats the word very slowly . . . 'restraint.' He looks around the room. Did they get it?

Continuing, "Gold was a discipline; the government could only print so much money, based on the amount of gold it possessed. Printing money not backed by gold had been tried before in history, but always failed. Always. The Continental, the Confederate dollar, the Mark in Weimar Germany are a few examples."

"Well, what went wrong after Nixon took us off the gold standard?" a student quips."Nothing went wrong immediately, but rather, it was the beginning of a slow creeping inflation. A car costing $3000 in 1971, cost $7000 in 1980, $14,000 in 1990, $18,000 in the year 2000, and $25,000 by 2015. Everything kept going up in price, medicine, housing, food, gas, you name it. As a result of this new freedom the government had to live beyond its means, the national debt grew dramatically, from a manageable figure in 1970, to a trillion dollars in 1980, three trillion in 1990, six trillion in 2000, to a staggering eighteen trillion by 2015."

"Why was the government spending so much money?" another student asks. "Without any restraints, it was easy. They took on new responsibilities and created new dependencies. Entitlements grew like," he paused looking for the right words, "grew like weeds in an open field. And the military, without budget constraints, found itself fighting in conflicts worldwide. Tax payers never felt the cost; war was simply added on to the national debt. Baby boomers were retiring in droves, putting enormous strains on Medicare. There's only one way to deal with this. Only one way," he repeated. "Go into debt, greater and greater debt."

"At what point did things spin out of control?" asks a student. "Oh," scratching his head, "let's start" pausing for a moment, "let's start with hurricane Katrina. In a way, Katrina set the stage for the run-away inflation. After the storm, it was assumed the Federal Government would pay for everything associated with a disaster, man-made, or nature-made." It was no longer an individual, local community or state issue. All eyes looked to Washington. They paid for everything; paid by increasing the national debt, of course.

The instructor takes a slow deep breath. "O.K., now for a bit of history; in 1811 we had the New Madrid earthquakes affecting the states of Missouri, Tennessee and Arkansas; the largest quakes in America, vast in area and enormous in their devastating effects. Thousands of aftershocks continued for months, opening up crevices in the land. Those in the area reported sounds of loud thunder in the distance accompanying the quakes." The professor paused, looked at each face. Mesmerized, he had their attention. Continuing, "They were so powerful; boatmen on the Mississippi claimed for many hours the river ran backwards. Terrifying, these quakes were nothing short of terrifying."

"So, when the New Madrid fault slipped again in 2016, creating an 8.9 earthquake, it was no surprise. Scientist warned this was still an active zone. The surprise was, nobody was prepared, no emergency funds set aside, no plans for temporary housing for millions who would need shelter. After Katrina, the thinking was, the Feds would handle it. But this was different, much larger in scope. Insurance companies couldn't manage and went belly-up. Manufacturing plants in the area were leveled." Small businesses shut down. He looked around the room, studied the faces "Everyone in this room probably remembers the images on T.V., and the calls for the government to do something."

"We were paying for multiple wars in the Middle East and sky-rocketing Medicare costs back home. And, we were paying interest on the twenty-two trillion dollar national debt. The earthquake, this was the straw. He paused for what seemed like a minute, "The straw."

"All eyes on Washington, the government borrowed and borrowed. Money flowed like water gushing out of a fire hydrant. We couldn't print money fast enough." Pausing, he puts his hand to his forehead, rubbing his temples and looks down, as though speaking to the floor. "In Weimar Germany, during the last days of their hyperinflation, the need for notes, for currency, was so urgent; they didn't have time to print the currency on both sides, so they printed only on one side." A student in the back of the room whispers "Man, I think he's getting choked-up."

The professor looks up, "I told the Congress to stop it! I told them over and over, this debt will destroy us. But politicians, from all over the country, made sure the money kept flowing, and they'd get a piece of the action. It was a money party with no adult supervision."

"The value of the dollar plummeted; prices skyrocketed, devastating the middle class. People spent their money as fast as they could; knowing prices would go up the following day. The public finally came to the awareness the dollar was paper, backed by nothing, simply paper. The dollar, at home and worldwide was no longer trusted. Hence, the eventual creation of the new currency, those bills crumpled up in your pockets."

"This was the Great Inflation. It was inevitable; the earthquake helped things along, but, it was inevitable."

"So, why are you blamed?" a student asks. The instructor pauses for a moment. "I'm a scapegoat" he says matter-of-factly. "Yes, I was in charge of the printing presses, but I was only responding to the call for greater and greater debt. Like I said, everyone looked to Washington to solve their problems.I was part of a well-oiled debt machine."

The classroom fell silent. Finally, one student, out of discomfort with the quiet, asks "do you think you are... are responsible?" Shoulders back, crossing his arms against his chest, "Absolutely not! I gave the American people what they wanted, what they had grown to expect." "What was that?" the same student asks? "An economy created by Washington ... a false utopian economy" he fires back.

A student in the back of the classroom stands up as if to signify an important question. "I don't get it" he says, "the dollar trashed; we issue a new currency, the New American Dollar." He hesitates, then almost shouts: "the N.A.D. isn't backed by anything either. This is stupid, really stupid. What will prevent this inflation thing from happening again?"

"Yes, yes," the instructor shouts. "You hit the nail!" He looks across the room slowly, studies the faces, calculates their ages and approximate life spans. "If you look at history, at human nature, at politicians, without a currency backed by something, something that restrains spending, this inflationary cycle will happen again, and again, and again." He pauses for a moment, and says slowly "it will happen again . . . in your lifetime."

Looking at his watch, he flicks his wrist towards the door, signaling the students to leave. "Go. Tomorrow, bring your questions." They file out, many voicing a Thank you.

After straightening his tie, he follows the last student out, thinking: They got it. That felt good, really good.