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Well, I dont think the Fed "pretends not to know what causes inflation"... Everyone knows what causes inflation, its right there in the name
by MeImCounting 2y ago
Well, I dont think the Fed "pretends not to know what causes inflation"... Everyone knows what causes inflation, its right there in the name
- kibwen 2y agoEvidently not, because otherwise people would realize by now that inflation has causes beyond simply an increase in M1. Banks lend more money? Inflation. Economy-wide supply shocks? Inflation. Population decrease? Inflation. Money has a market value, and it drifts with supply and demand.
- WalterBright 2y agoCompare the increase in the money supply with the inflation rate. There's about a 13 month lag. > Banks lend more money? Inflation. People paying back loans? Deflation. It cancels out. Except the Fed loans out money and does not pay it back - inflation. > Economy-wide supply shocks? Inflation. Where does the extra money come from? And what about when the shocks end, why doesn't the price come back down? > Population decrease? Inflation. Reduction in demand means deflation.