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Inflation is the term you may be more familiar with. As availability of currency expands and becomes less valuable, the price of things goes up to maintain valu
by randomdata 6y ago
Inflation is the term you may be more familiar with. As availability of currency expands and becomes less valuable, the price of things goes up to maintain value parity. In particular, right now money is being printed to ease the effects of COVID-19 issues, which is causing a large spike in prices as a form of inflation.
To complicate matters, though, inflation is normally thought of as CPI; a measure of what people are spending on consumable items. Things like stocks, housing, and other assets that are jumping in price are not consumable goods and services. As such we try to avoid using the term inflation for this phenomena, but the principle is the same.
Modern monetary policy seeks to try and keep that added money off of "Main Street", so that your groceries and gasoline aren't skyrocketing in price, but ultimately the money has to go somewhere, and that somewhere is "Wall Street".
- milkytron 6y ago> Things like stocks, housing, and other assets that are jumping in price are not consumable goods and services. As such we try to avoid using the term inflation for this phenomena, but the principle is the same. I believe the term for this is "asset inflation", which is just a different form of inflation.
- randomdata 6y agoYou are quite right, but the use of inflation carries some emotional baggage being associated with CPI, and thus I would suggest that the term "asset inflation" is avoided in general conversation.