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There is also the fact that with each USD you can buy less and less as a private person. So to have the same quality of life, you expect higher returns. Which
by rvnx 2y ago
There is also the fact that with each USD you can buy less and less as a private person.
So to have the same quality of life, you expect higher returns.
Which mean that you will choose to invest into companies that offers a better return, and for that, these companies will have raise their prices, which in turn, spirals into additional price raises.
- crazygringo 2y agoThat's not the fundamental cause, though. Companies can't just raise prices to achieve whatever return they want, because once you go above the profit-maximizing price, the fall in demand outweighs additional revenue per item, and once you go above competitor's prices, demand similarly falls. Yes investors look for maximal returns, but those are limited. Fundamentally the ceiling is set by demand and by your competitor's prices.