Why Christians should care about inflation

Prices for gas at an Exxon gas station on Capitol Hill are seen March 14, 2022 in Washington, D.C. The cost of gasoline continues to rise across the globe due to the Russian invasion of Ukraine and continued inflation associated with the global pandemic.
Prices for gas at an Exxon gas station on Capitol Hill are seen March 14, 2022 in Washington, D.C. The cost of gasoline continues to rise across the globe due to the Russian invasion of Ukraine and continued inflation associated with the global pandemic. | Win McNamee/Getty Images

The official rate of inflation recently soared above 8% according to state statistics. Readers may have a gut feeling that prices have risen higher, and you may be right. According to Shadow Statistics, the inflation rate is closer to 15% using the same methods the US government employed in 1990. 

Why should Christians be concerned about inflation? Because it’s theft from the poor and middle classes on the grandest scale possible. Eight percent inflation means that someone has stolen 8% of your money by making it buy less food, clothing, gas, etc. 

Biden blamed Putin for inflation: "Your family budget, your ability to fill up your tank, none of it should on hinge on whether a dictator declares war and commits genocide a half a world away…"

Senator Elizabeth Warren (D) blamed Covid and greed, but especially greed:

"What has also happened is that now that we’re living in America where there’s a lot more concentration in certain industries, look at the oil industry, look at the meat industry, look at groceries generally. What’s happened is that these companies have said ‘you know, we’ll pass along costs, but while we’re at it and everyone’s talking about rising costs let’s just add an extra big dollop of cost increases to expand our profits."

They’re both wrong and merely recycling the popular theories of socialists and others uneducated in economics. History, including recent events, is so complex that politicians can find justification for any crackpot theory. Understanding inflation requires some knowledge of economics. 

The real cause of price inflation is the tsunami of new money the Federal Reserve has unleashed on the economy over the past several years. In some studies, the maximum impact on prices of that flood of money can come as late as five years from date of the policy implementation. In other words, today’s price increases may be the result of policy changes years ago. The great monetary economist Milton Friedman argued that monetary policy acts with long and variable lags.

So, how does the Fed control the price of eggs at Walmart? Understanding the answer requires being able to follow short trains of logic. Many people can’t manage that, so they become suckers for conspiracy theories. 

The Fed initiates price inflation on purpose to “stimulate” economic growth by lowering the interest rate it charges banks or by purchasing securities from banks, which then have more money to lend. But to encourage more people to borrow, banks must reduce their interest rates on loans. Finally, businesses, the government, and individuals borrow and spend the new money. Most of the borrowing and spending today comes from the federal government. 

In economic language, that spending represents an increase in demand for goods and services, so when you hear reporters say higher prices result from demand and not an increase in the money supply, readers will understand that the two can’t be separated. Monetary policy works by increasing demand. Yes, supply chain bottlenecks can make inflation worse but they are always temporary and self-reversing. 

Inflation is destructive because prices coordinate production and consumption by signaling companies to produce more when prices are high and less when prices are low. Consumers buy less when prices are high and more when they are low, all other things remaining the same. But coordination happens only when prices accurately reflect supply and demand and accurate prices require a relatively fixed stock of money, such as the US enjoyed during the best years of the gold standard. When the Fed counterfeits money to expand the supply, it creates an artificial demand for cars and houses and eggs. Because the supply of eggs hasn’t risen, their prices rise.

The Fed process of money creation is a clear violation of the Biblical commands prohibiting false weights and measures: “You shall do no wrong in judgment, in measures of length or weight or quantity” (Leviticus 19:35). “A false balance is an abomination to the Lord, but a just weight is his delight” (Proverbs 11:1). “You shall not have in your bag two kinds of weights, a large and a small. You shall not have in your house two kinds of measures, a large and a small” (Deuteronomy 25:13-16).

During much of the history in the Hebrew Bible, money was a weight. The shekel was the same weight as 180 barley grains. When Abraham bought a cave to bury Sarah in in Genesis 23, he paid 400 shekels of silver for it and would have used a scale to weigh the amount of silver. The dollar, pound, and most units of money were originally measures of weight. So, when the Fed floods the country with new money that it created out of thin air, it corrupts the money in the same way that false weights did in the Hebrew Bible. 

Who benefits from inflation? Those working in the financial sector and the government because they get the new money first before prices have risen. The working poor get the new money last and become poorer. Fed monetary policies are one of the main reasons for rising inequality in the US.

Roger D. McKinney lives in Broken Arrow, OK with his wife, Jeanie. He has three children and six grandchildren. He earned an M.A. in economics from the University of Oklahoma and B.A.s from the University of Tulsa and Baptist Bible College.  He has written two books, Financial Bull Riding and God is a Capitalist: Markets from Moses to Marx, and articles for the Affluent Christian Investor, the Foundation for Economic Education, The Mises Institute, the American Institute for Economic Research and Townhall Finance. Previous articles can be found at He is a conservative Baptist and promoter of the Austrian school of economics.

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