Quote from: pening on March 05, 2014, 07:40:02 PM

Quote from: BitOnyx on March 05, 2014, 02:35:40 PM

...When you give this cheque as a payment to one person, cheque for 100$, you still have this money on your account until this person go to bank with this cheque and this person have this cheque for 100$ in her/his hand. So you both have 100$ dollars (total 200$) made of only one part of 100$. This person can even pay with the same cheque to any one who would accept it.

And this way we have 100% inflation on 100$ until that person monetize this cheque.

This is *not* inflation. Inflation is measured in prices rising, not increasing the money supply. Where has this basic misunderstanding come from to be so widespread?

While his explaination is flawed, his understanding of what inflation actually is may not be. A rise in the general price index is a symptom of inflation. The cause of inflation, and therefore what inflation actually is, is the expansion of the monetary base in excess of the economic/population/general growth rate. Take your pick.