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People don’t like hearing the obvious. Also one correction, governments printing money IS inflation. They inflate the money supply. Banks can also create additi

by sfe22 4y ago

People don’t like hearing the obvious. Also one correction, governments printing money IS inflation. They inflate the money supply. Banks can also create additional inflation, but that power is granted by governments usually. Usually when significant inflation is created prices go up across the board (what we are seeing now) or prices stay relatively still, when they would have normally gone down due to more efficient production (2010s).

gbin 4y ago
"government printing money IS inflation" is not true. Government printing money is one way of possibly generating inflation. There are other ways: scarcity of goods and services through the lack of productivity is another example.
- sfe22 4y ago
  You can look up the old definition of inflation (since recently they have changed it to be more confusing), which comes from the word inflate. Refers to inflating the money supply. Printing money is inflating the money supply. Scarcity of goods or services a will cause those respective prices to go up, but not broad price increases, which is often the cause of inflation.
  - dermesser 4y ago
    This is untrue, for example for energy or rent: if energy prices or rent increase, almost everything will also suffer from increased prices, as energy and rent go into almost every product of a modern economy.
    - sfe22 4y ago
      I would say that energy and rent are not very correlated, so if both are increasing rapidly at the same time, it is probably because of inflation. And which one of my statements is not true? Definition of inflation or that scarcity of a product will cause that product to become more expensive?
danaris 4y ago
Inflation can also happen when companies across the board decide that, despite record profits, they can all raise prices.
- sfe22 4y ago
  You mean companies can create cartels and raise prices together? Yes, that can happen, but firstly, that is not inflation (no increase in money supply happened), and secondly most non-government cartels are not very stable. They leave opportunities for competition to take their business.

by sfe22 4y ago

gbin 4y ago

"government printing money IS inflation" is not true. Government printing money is one way of possibly generating inflation. There are other ways: scarcity of goods and services through the lack of productivity is another example.

sfe22 4y ago
You can look up the old definition of inflation (since recently they have changed it to be more confusing), which comes from the word inflate. Refers to inflating the money supply. Printing money is inflating the money supply. Scarcity of goods or services a will cause those respective prices to go up, but not broad price increases, which is often the cause of inflation.
- dermesser 4y ago
  This is untrue, for example for energy or rent: if energy prices or rent increase, almost everything will also suffer from increased prices, as energy and rent go into almost every product of a modern economy.
  - sfe22 4y ago
    I would say that energy and rent are not very correlated, so if both are increasing rapidly at the same time, it is probably because of inflation. And which one of my statements is not true? Definition of inflation or that scarcity of a product will cause that product to become more expensive?

danaris 4y ago

Inflation can also happen when companies across the board decide that, despite record profits, they can all raise prices.

sfe22 4y ago
You mean companies can create cartels and raise prices together? Yes, that can happen, but firstly, that is not inflation (no increase in money supply happened), and secondly most non-government cartels are not very stable. They leave opportunities for competition to take their business.