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Hrm. My understanding is that inflation can affect anything we attach value to (and that broadly speaking "value" is also an abstract concept). Suppose the pri
by phillmv 16y ago
Hrm. My understanding is that inflation can affect anything we attach value to (and that broadly speaking "value" is also an abstract concept).
Suppose the price of oil (or any other primary resource) jumps 50%, increasing the nominal cost of everything that has been made from it. Your gold backed dollar now can be exchanged for less things than before, irrespective of the total supply of gold in the world.
Does that make sense? I'm woefully under read in economics.
- StavrosK 16y agoThat's not inflation, though, that's just a price change...
- phillmv 16y agoYesterday, I could get 1kg of sugar for $1. Today, I can only get 0.75kg of sugar for $1. My dollar is worth less (can be exchanged for less goods) than it was before - I'm pretty sure that's inflation.
- nradov 16y agoThe word "inflation" has several different meanings. You're talking about consumer price inflation. There is also monetary inflation, which is the supply of money plus debt (marked to market). Those are really completely different things with only a very loose relationship.