Well inflation has little difference between fiat and deposit currency, more with the facilitation between production and trade. When you do increase the money supply, it becomes increasingly worthless which is the main definition of inflation. However, this can be offset by production and/or trade in the real world growing at the same rate of increased creation of debt (which is money, because without money there could be no debt and the other way is true as well).

The Government who prints the money (fiat currency) only makes up about 5% of total monetary value in the system. Money gets created and destroyed every second of every day. Do you wonder where the bank gets its money to give people who take out student, auto, home, or any other types of loans? It simply creates it out of nothing and writes it into your account or check for you.
IgotQuestions Reviewed by IgotQuestions on . Does raising minimum wage cause inflation? We raise minimum wage in order for people to afford to live, but does raising minimum wage actually encourage inflation? I have yet to come up with a definitive answer to this question. When cost of living increases, people need to make more in order to adjust, but at the same time, when the wages goes up, the cost of living tends to go up with it. Do landlords and the like raise prices because the consumer can afford to pay them again. Basically, we seem to increase minimum wages in Rating: 5