Two important questions to be answered: (1) What is inflation? What causes it? What are the effects? Inflation is an increase in the quantity of money available caused by an increased in the production of gold and silver, or an over-issuance of paper money. Prices rise. Purchasing power falls. (2) Why should somebody hoard money? Cash-holding plays an important part in building capital. Every unit of capital is in some way dedicated to production. Owning cash is either a sound or an unsound investment, but it is always an investment. The two processes - increased cash holding and increased capital accumulation - take place side by side.
Recorded March 26,1971. Special thanks to Bettina Bien Greaves for making this important recording available. [1:08:43]