Inflation Tax Book


inflationtax amazonPete Comley published his first book on inflation (Inflation Tax) in 2013. It has now been superseded by Inflation Matters (2015) which examines the impact and causes of inflation over a longer period.

Inflation Tax is still available from Amazon.

It covered the following areas:


The purpose of this section is to provide you with an understanding of what inflation is, what causes it, and to show you why it has been such a problem since the war.

1. Inflation – how it affects you

In this chapter, you’ll understand about the history of inflation in the UK and the fact that it all changed in 1945. You’ll also learn why it continues to be a problem for everyone today because it is gradually, but continually, eroding your wealth and purchasing power.

2. What is inflation?

In this chapter, we will look at ordinary people’s understanding of inflation. We’ll see that most have a limited knowledge and interest in the subject. In particular, we suffer from something called the “money illusion”, which can cause us to make decisions that are not always in our best interest.

3. Theories of inflation

In this chapter, you will learn about the two main economic theories of inflation and the evidence for them: Monetarism and Keynesianism. We’ll try and explain them as simply as possible, as it is important to achieve a basic understanding to comprehend better some aspects later in the book.

We end the chapter by going beyond these economic descriptive theories to question who has been responsible for inflation, and will also look at the case for zero inflation.

4. Measuring inflation: RPI/CPI

This chapter focuses on the two main inflation indices quoted in the UK: RPI and CPI. It looks at what they are and why they both exist. Specifically, it shows how the government’s preferred measure (CPI) makes inflation look less than it really is.


The section will look at the history of UK debt. It tells the story of how the UK decided to use inflation as the primary way of dealing with it.

5. Government debt and the UK’s financial Dunkirk

In this chapter, you will learn about UK government debt and why it exists. Historically, waging wars was the main reason governments borrowed money. Indeed, following World War II the UK’s total debt reached record proportions. Since the 1970s, however, issuing debt has been additionally used as a way to pay for more welfare, education and health expenditure than could be afforded from the money raised by taxation alone.

6. Labour’s post-war solution to the debt

This chapter will describe how the post-war UK Labour government started using inflation to deal with its debts alongside a policy of keeping interest rates low. Specifically, it will examine the important role played by both John Maynard Keynes and Hugh Dalton (the Chancellor of the Exchequer in the post-war government).

7. US inflation reduces UK debts

This chapter continues the story of how inflation became embedded in the UK in the decades after World War II. In particular, it focuses on the impact the decision by the US to target inflation had on the rest of the world. It shows that, by 1970, the burden of the UK’s wartime debts had largely been eroded by inflation.

8. Debt – 1970s onwards

In this chapter, you’ll understand why the government had to resort to inflation tax. Government expenditure is ever-increasing, but tax revenues are not keeping up. In addition, you’ll learn that there is no published plan to pay off the UK government debt and, incredibly, we are still paying for the Napoleonic Wars.


This section shows how and why governments implement inflation tax.

9. Who benefits from inflation tax?

Although the primary reason for governments to use inflation tax is to reduce their debt burden, you’ll see that there are many ways in which governments and others benefit from it.

10. Who pays inflation tax?

This chapter will covers who exactly pays the inflation tax to the government and who else ends up effectively paying inflation tax to other parties. It also looks more widely at the impact of the tax on society.

11. Disguising inflation tax

In this chapter you will learn about the ways governments have been making inflation look lower, so small that it is largely ignored by the population.

12. Problems implementing inflation tax

In this chapter you’ll learn about the difficulties governments have in creating the right level of inflation for inflation tax to work. It is easy for inflation to exceed a tipping point and suddenly get out of control.


In this last section, we will look at the implications of inflation tax, both in terms of how to best to avoid its effects and also what are the likely inflation scenarios for the future.

13. How to pay less inflation tax

In this chapter, we’ll look at the evidence of the effects of inflation on various asset classes to examine which, if any, might be the best way to store wealth to pay less inflation tax. You will learn that there is no simple answer to this problem, and that you will end up paying some inflation tax.

Can I also remind the reader that I am not a financial advisor, so the summary of the evidence presented here is for your informational purposes only and should not be regarded as a substitute for professional advice.

14. Future debt and inflation scenarios

In this chapter, we will try to predict the future by reviewing the current situation and contrasting it to the past – particularly how the world dealt with a crisis similar to the one we have now, in the 1930s. It reviews four potential scenarios and concludes that the most likely is continued financial repression and inflation tax.

15. Concluding thoughts

In this chapter, I’ll draw together the implications of the whole book.