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imho inflation is mostly psychological. In a steady state scenario when today's business is like yesterday's, people feel less inclined to put up their prices f
by dboreham 4y ago
imho inflation is mostly psychological. In a steady state scenario when today's business is like yesterday's, people feel less inclined to put up their prices for social psychology reasons. When there's some sort of dislocation, they all of a sudden feel those factors are less important and more justified in putting up their prices. A pandemic is just an example of one kind of dislocation. It doesn't really matter the specifics of how the pandemic affected the economy -- that's just some noise on top of the signal that is all about "things are different now, so please accept my new increased pricing".
The same thing can be done in reverse: e.g. BigTech firing gazillions of people and suddenly "Ah, no we're not paying the kind of salaries that were common in the before times".
- tracker1 4y agoOver half of increased prices most people see are not inflation driven though... it's using it as cover to maximize prices, which can have good and bad points. In the end, it's a vicious cycle of a tail wagging the dog, then the dog eats the tail, then there's a bloody mess for everyone else to clean up.
- jonhohle 4y agoFind “easy money” and you’ll find inflation. It’s really not rocket science. Houses never lose value, let’s give those loans out to everyone - housing bubble. Heck, housing inflation goes back to the GI Bill. Everyone should go to college - let’s give kids hundreds of thousands of dollars to spend at an institution of their naive choosing! Student loan “crisis”. If I’m charging $1 for something and I know you have $5 to spend on it, the price is now $5.
- theGnuMe 4y agoI think money is psychological too. I still think $20 is a lot of money but some people think $50 is the new $20.