So, this is an experimental comic. Odds are, it doesn’t make any sense to you. So I will explain it. I wanted to do a comic about how inflation is effectively a transfer from lenders to debtors. You could argue that it’s no small part of the reason why so much of the effort of central bankers goes into curbing inflation.

So, I showed the banker lending dollar bills that were very big, but as TV returned dollars to pay the banker back, he gave him smaller and smaller bills. See what I’m saying?

Another way to think about it is this. If, at the beginning of a loan, one dollar buys one candy bar. Then, at the end of the loan, it only buys a half a candy bar, then that last dollar the debtor pays the lender isn’t nearly the same dollar that the lender lent the debtor at the beginning of the loan.

Does that make sense?

OK, everything I wrote there is true. Economists and policymakers would not (I don’t think) quibble with any of it. Now that the first six panels make sense, go back and look at the last two. They are meant to put an even larger context on the issue that some folks might quibble with. And that’s a quibble I am happy to have.

Be Sociable, Share!
↓ Transcript
Panel 1. TV walks into an office and the Banker is sitting at his desk with five huge one dollar bills in his hand.
TV: Hey, Banker Guy! Can I borrow five bucks?
Banker: Sure thing!

Panel 2. TV is in the office holding out a big one dollar bill.
TV: Here's my first payment.
Banker is smiling.

Panel 3. TV is handing the Banker a medium sized dollar. The Banker is smiling.

Panel 4. TV has handed the banker a very small dollar.

Panel 5. TV hands a small dollar to the Banker, who looks surprised.
TV: One more and we're square.

Panel 6. TV is standing right at the desk, setting some money on it.
TV: Last one! 40ยข interest. Boom! We are good. Thanks, bro!
Banker is frowning.

Panel 7. Banker is standing at his car, unlocking it.
Banker [thinking]: Man, this inflation is kiling my profits.

Panel 8. Banker is in his car and it pulls away from the curb. It is a red Mercedes with a license plate that reads "RICH".