3 ms·

It's not just the amount of money, it is the amount of money available vs the amount of goods available. I'm not an enconomist, so I don't know exactly why, but

It's not just the amount of money, it is the amount of money available vs the amount of goods available. I'm not an enconomist, so I don't know exactly why, but somehow all the additionally money (which is in form of credits) doesn't end up in the hand of consumers. I think what is going on is that it is harder and harder to get return on investment, which makes it harder to get money through "organic" investments, so they make money cheaper and lower the interest rates, which makes it even harder to get ROI. So all the money they pump in just goes around and keeps the wheels turning artificially. (Meanwhile all the capital flees into housing, crypto and similar markets and inflates them like crazy.) Anyway, I think the reason behind the inflation is not that the amount of cash is to high. Wages have not grown accordingly and demand has not gone up. But due to Covid, supply chain issues (related and incidental), international conflict, etc., we have just been producing less stuff. So I would say the inflation of some goods (housing) is due to the simmering financial crisis, and the inflation of others (like wheat, cooking oil, electronics) is due to political strife and economic instability.

wronglyprepaid 4y ago
> It's not just the amount of money, it is the amount of money available vs the amount of goods available. Okay, but ... if you just pumping money into the economy, are you not by definition just pumping money into the economy, as opposed to goods and money? If congress could by decree make goods why would anyone need to work?
- captainmuon 4y ago
  If people (companies) just use that money to buy financial products, pay off other debt, and so on, and it just kinda circulates in the banks, but most of it doesn't end up in consumer's hands - then there is no reason that the prices for consumer goods should go up, right? I'm not sure demand driven inflation (= money supply driven) is a relevant problem at the moment. On the contrary I sometimes suspect it is a bogeyman used to justify not raising wages.
  - wronglyprepaid 4y ago
    > If people (companies) just use that money to buy financial products, pay off other debt, and so on, and it just kinda circulates in the banks, but most of it doesn't end up in consumer's hands - then there is no reason that the prices for consumer goods should go up, right? Even if there was no direct stimulus, which there was, companies don't just take stimulus, put it in their bank account and forget about it. But sure, if you have some evidence to suggest that this money never really entered circulation I think it would help your case. The reality is though, money supply increases by 400% since March 2020 and historic inflation followed. There may be other reasons, but I'm not sure what you would expect to see other than inflation. > On the contrary I sometimes suspect it is a bogeyman used to justify not raising wages. Wages have increased have they not? This is another signature achievement of the much maligned Biden administration, that the media is trying to hide. Wages are at historically high levels.

wronglyprepaid 4y ago

> It's not just the amount of money, it is the amount of money available vs the amount of goods available. Okay, but ... if you just pumping money into the economy, are you not by definition just pumping money into the economy, as opposed to goods and money? If congress could by decree make goods why would anyone need to work?

captainmuon 4y ago
If people (companies) just use that money to buy financial products, pay off other debt, and so on, and it just kinda circulates in the banks, but most of it doesn't end up in consumer's hands - then there is no reason that the prices for consumer goods should go up, right? I'm not sure demand driven inflation (= money supply driven) is a relevant problem at the moment. On the contrary I sometimes suspect it is a bogeyman used to justify not raising wages.
- wronglyprepaid 4y ago
  > If people (companies) just use that money to buy financial products, pay off other debt, and so on, and it just kinda circulates in the banks, but most of it doesn't end up in consumer's hands - then there is no reason that the prices for consumer goods should go up, right? Even if there was no direct stimulus, which there was, companies don't just take stimulus, put it in their bank account and forget about it. But sure, if you have some evidence to suggest that this money never really entered circulation I think it would help your case. The reality is though, money supply increases by 400% since March 2020 and historic inflation followed. There may be other reasons, but I'm not sure what you would expect to see other than inflation. > On the contrary I sometimes suspect it is a bogeyman used to justify not raising wages. Wages have increased have they not? This is another signature achievement of the much maligned Biden administration, that the media is trying to hide. Wages are at historically high levels.