A reader of this column sent me a letter asking my views on this subject. Though not an expert on inflation, I do have my opinions about it.

My father likely had a great influence on me in regard to this issue. He believed that inflation was the bane of all and an enemy especially of the prudent saver. “The money you save will depreciate in value,” he would say. He was especially suspect of life insurance that would pay out a designated dollar amount: “The dollars you put in won’t be as valuable as the dollars that are finally paid out to your heirs.”

He hated inflation and it was one of the reasons, I believe, that led him to begin, in a small way, investing in stocks. As a dairy farmer, everything he earned on the farm went back into the farm. However, if non-farm income was realized – like the proceeds of the sale of a parcel of land – he would, after much research, invest that in stocks as a way to try to offset the impact of inflation. (This was back in the days before mutual funds, IRA’s or the 401(k).

He would not invest in very small or untested companies. He would look at companies that had a track record, evaluate their earnings, their price/earnings ratios, their debt…before making his decisions. He called it “value” investing. He would check regularly through reading Barron’s or some other investment publication on whether or not these companies were continuing to follow a prudent business plan.

He couldn’t control the price of milk (which usually never kept up with inflation,) nor with the cost of farm machinery which always kept rising at least, if not faster than the rise in inflation. So, he did what he could with these stock investments to try and offset the deteriorating value of money – which to him defined inflation.

There are a lot of causes for inflation–federal deficit spending, increasing wage rates, the cost of food, housing, energy, etc. But, what my Dad finally came to conclude was that inflation, no matter the cause, was a curse that would always be around and was something he couldn’t control.

Fortunately, we live in a country where at least one major economic player continues to try to tamp down inflation – and that is the Federal Reserve Bank. Though its primary means of doing so is setting the cost of short-term money loaned to banks, this interest rate lever has worked over the years to dampen inflationary pressures. As a result, the United States, despite its bloated debt and deficit spending, continues to be a country where, at least, there is a target of trying to keep inflation at or below 3% per year.

We are the envy of some third world countries whose inflation rates can reach 50% or even 100% a year.

I remember taking my first economics course in college. My Dad, who only had one-semester of college before needing to return home to run the farm, would quiz me regularly about what I was learning. But, in truth, I think he knew more about economics and, especially, inflation than I did. He experienced it every day in running the dairy farm.

So, to the reader who sent me the letter, here is my answer: I am still not an expert at knowing or understanding all that there is to know about inflation. However, my Dad was right – it is a curse that will always be with us, and the only way we can offset it is by the old-fashioned way of trying to increase our income, reduce our expenses, and then invest prudently to try to offset its effects.

Rolland Kidder is a Stow resident and a former New York state Assembly member.