3 ms·
Not even as difficult as that. As the prices rise with a regular periodicity, people stock up more goods with expectation that in future their money will buy th
by option_greek 5y ago
Not even as difficult as that. As the prices rise with a regular periodicity, people stock up more goods with expectation that in future their money will buy them less. Which causes more price increases and corresponding increase in stocking.
Obviously 6% won't do that but at higher levels its the complex dynamics driving inflation than good old supply demand balance. And don't think that exports will solve hyper inflation because at that point other countries will also expect devaluation in currency which becomes a self fulfilling prophecy. Again not applicable to dollar and USA for the moment but at higher inflation levels anything is possible.
- logfromblammo 5y agoSomebody has to stock up. Just-in-time delivery didn't, and that's why we're in this supply chain situation. In the future, not only is it possible your money will buy you less, it is also possible that no amount of money, no matter how large, can obtain what you need. For instance, anything with a silicon chip in it. For some goods, every known upstream retailer is out of stock, with no idea when it will be replenished, and the resellers are doing business at way above MSRP.
- wbsss4412 5y agoWhat you’re describing around consumer expectations is that the absolute price level continues to rise at a higher as consumer expectations change. It doesn’t follow however that the rate itself increases due to this dynamic. Consumer expectations tend to anchor inflation at a particular level. This is just a fundamental misunderstanding of what causes hyperinflation.