Inflation is always a monetary phenomenon, why people can't understand it?
The money market, like any market, is affected by an increase in supply (in this case the printing of banknotes by the central bank or federal reserve) and the non-increase in demand, which generates that the value of money falls and more money is needed to buy the same thing, it's simple.
>thread is stillborn for not having a picture of a grill
Inflation is always a monetary phenomenon, why people can't understand it?
Brayden Ross
Hudson Sanders
They can't, or refuse, to understand it because that would place them at fault for supporting stimmy gibs and other printing programs.
Dominic Sullivan
Are you saying the price index that you've included in your picture only rises with an additional amount dollars in circulation?
Otherwise you've included a measuring statistic that is unrelated to your claim, discrediting your claim
Adrian Ramirez
Yes, money loses value so prices "rise"
Julian Martin
It is becoming more and more common in the US.
Sebastian Gonzalez
Well, I mostly agree with you.
But due to the fact that many markets are managed through subsidies/price-controls; the increased volume of money can have various effects
Having more money in circulation should theoretically devalue everyone else's money at the same time, but what you "feel" from a ton of money being printed isn't necessarily intuitive.
Because let's say you give someone $Trillion. Well, that might sound like it would fuck up the economy; but if that person only actually spends, let's say $1Million, then it actually wouldn't be very noticeable.
And it also depends how that money is moved around; if it's just spent into pumping up crypto or other Blackmarkets, then certain markets won't "feel" that injection, depending on where the spending was localized, and what the money was being spent on.
Austin Perry
>Yes, money loses value so prices "rise"
Well, that doesn't really make sense though.
If money's value is decreased by excessive-inflation, and you raise the price to reflect the inflation; then you aren't actually going to feel any of the inflation. You're going to be in the same position as you were if your prices scale with inflation.
If you normally sold an item for $100, and CPI/inflation/whatever-metric-you-want-to-use say that the $'s purchasing power has decreased by 10%; then re-pricing that item at $110 means you won't feel the inflation when selling that item.
Unfortunately, the buyer is going to feel it over TWICE as much- because that $100 is now worth only $90- so he would need another ""$20"" to afford that $100 item.
Juan Taylor
John Ross
Here you go OP, maybe picrel will help next time.
Jaxson Hall
the difference is that the seller has to make a profit, if he buys a product at $10 and sells it at $12, he will have to start selling it at $14 to buy at $12 and that generates a destabilization because there is stock
Bentley Wright
That's why I think many of their currency-metrics don't properly account for the realistic flow of money, mixed with the fact that almost all regulated to some degree which artificially affect markets in their own way.
Like, if you had a break-away society, and gave them $Trillion- but this break-away society didn't interact/trade with the anyone outside their community.
Sure, you could say $Trillion was technically "added" in to circulation; but in this situation, inflation would be irrelevant, assuming the $Trillion genuinely does stay within the break-away society.
Robert Martinez
But also, it really depends on who, how many, how much, and what the money is being spent on, in order to accurately gauge the market impacts.
It depends on what exactly you're trying to accomplish with your short-term/long-term economic strategy.
If a foreign country prints off an ungodly amount of currency, and uses that to buy US Bonds or whatever- then they could essentially be fucking our economy by trading us money worth less than dirt.
That's not to mention the numerous financial shenanigans that happen in our own country today.
Gabriel Scott
Well, that's obvious considering that money has value because there is a "social contract" that says so, it's not even backed in gold as it used to be.
But it is a common practice of Latin American central banks to sell dollars when their value is too high to flood the market and lower its value, in the last year here in Uruguay the central bank had to buy dollars because it was falling too low.
Luis Long
Did you bait him into a response just so you can write all that?
Matthew Sullivan
>it is a common practice of Latin American central banks to sell dollars when their value is too high to flood the market and lower its value
U$D, or LatAm dollars?
>Did you bait him into a response just so you can write all that?
idk, I guess so
Gavin Rivera
U$D, there aren't latin american dollars, each country has its money, mostly pesos
Jason Smith
How is most of the U$D acquired by you guys?
Is it through financial banking loans and buying bonds kind of stuff, or does most of the U$D come from exchanging goods/service(including blackmarket trade)?
Lucas Howard
If you talk about ordinary people you just go to the bank and buy dollars, if you mean how they enter the country, it is through exports
Joshua Rivera
they understand, it's a story as old as time there is no free lunch, death and taxes etc, they don't care they want to defy history and so far they have.
Jack Turner
Ahh ok. I didn't know if you had a financial sector that liked to invest in various currencies or something.
Daniel Reyes
There is push inflation and pull inflation , we have both right now dopey
Jackson Walker
Inflation is a tax. That's it. It increased the government's money and reduces yours.