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>Unless people who can afford it are hoarding groceries an increasing monetary base shouldn't be affecting grocery prices you don't get it money is worth less

>Unless people who can afford it are hoarding groceries an increasing monetary base shouldn't be affecting grocery prices you don't get it money is worth less when there's more of it. especially 40% more of it. all the inputs to your groceries (labour, energy, materials, transport etc.) thus nominally cost more when inputs cost more, your groceries cost more

anonymouskimmer 4y ago
I actually do get it. An excess of money doesn't automatically make things cost more. An excess of demand with (more purchases), or for (higher prices), that money does. The demand excess has to start somewhere.
- elevenoh4 4y ago
  >The demand excess has to start somewhere. What do you think putting more money into circulation does to demand & nominal purchasing power? An excess of money causes increased demand per unit dollar and subsequently, higher prices and inflation, through mechanisms including the Cantillon effect, changes in monetary velocity etc. If i deposit more $ in your bank account, what happens to your nominal demand?
  - anonymouskimmer 4y ago
    > What do you think putting more money into circulation does to demand & nominal purchasing power? Ideally people would save for a rainy day. But people don't, and can't, always do this. Because for some this is the rainy day. Non-ideally I would assume that most demand increases would go for non-groceries, and non-commodities in general, such as housing and travel, though I would expect some increase in durable goods commodity prices as people replace older goods with newer. Yet here we have grocery price increases. Are salaries in the grocery production chain going up 18%? Warehouse costs? I doubt it. The price increases are mainly coming from elsewhere, not from money printing.
  - brewdad 4y ago
    If it was as simple as you say, why didn't we see double-digit inflation in 2021 and 2022 when the money in questions was actually being handed out? There are multiple factors at play here with "money machine goes brrr" being only one of the causes of inflation.

anonymouskimmer 4y ago

I actually do get it. An excess of money doesn't automatically make things cost more. An excess of demand with (more purchases), or for (higher prices), that money does. The demand excess has to start somewhere.

elevenoh4 4y ago
>The demand excess has to start somewhere. What do you think putting more money into circulation does to demand & nominal purchasing power? An excess of money causes increased demand per unit dollar and subsequently, higher prices and inflation, through mechanisms including the Cantillon effect, changes in monetary velocity etc. If i deposit more $ in your bank account, what happens to your nominal demand?
- anonymouskimmer 4y ago
  > What do you think putting more money into circulation does to demand & nominal purchasing power? Ideally people would save for a rainy day. But people don't, and can't, always do this. Because for some this is the rainy day. Non-ideally I would assume that most demand increases would go for non-groceries, and non-commodities in general, such as housing and travel, though I would expect some increase in durable goods commodity prices as people replace older goods with newer. Yet here we have grocery price increases. Are salaries in the grocery production chain going up 18%? Warehouse costs? I doubt it. The price increases are mainly coming from elsewhere, not from money printing.
- brewdad 4y ago
  If it was as simple as you say, why didn't we see double-digit inflation in 2021 and 2022 when the money in questions was actually being handed out? There are multiple factors at play here with "money machine goes brrr" being only one of the causes of inflation.