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If the government dumps a shitload of cash on everyone and the demand for bread goes way up overnight then the bread seller would 100% raise his prices out of s
by ericmcer 4y ago
If the government dumps a shitload of cash on everyone and the demand for bread goes way up overnight then the bread seller would 100% raise his prices out of sync with the cost of wheat. The bread seller is either charitable or dumb if he doesn’t sell for whatever people are willing to pay.
- rhaway84773 4y agoSo the US government dumped a shit load of cash on everyone and that’s why prices in the U.S. went up. Which doesn’t explain why other countries, where the government didn’t dump a shitload of cash, are seeing even higher price increases than the U.S. Also, what’s the mechanism for govt dumping shit load of cash allowing prices to go up? The usual suspects point to the fall in the value of the dollar, but the dollar is historically strong at the moment. Another mechanism could be a massive increase in demand, but that would be accompanied by a corresponding massive rise in GDP.
- randomdata 4y ago> Which doesn’t explain why other countries, where the government didn’t dump a shitload of cash, are seeing even higher price increases than the U.S. Wheat is a global commodity, and the Chicago price is what the world works off of. > but the dollar is historically strong at the moment. As compared to what? It is historically weak compared to wheat, but presumably you mean compared to other currencies? Global transactions largely take place in USD, oil in particular, and the increase in monetary supply ended up in the hands of Americans first, so they have more of it to spend while the rest of the world does not, leaving those holding other currencies trying to buy up more USD all while Americans are trying to hold onto it over inflation fears.