It has long been a rule of thumb to have $1 million saved for a comfortable retirement; but, thanks to inflation, the youngest generation of workers likely will need three times as much. According to...
Rapid inflation did start at the same time the money supply was increased.
There was a brief period when people got direct cash during the pandemic which businesses used as an excuse to hike up prices. However, once again, it was the choice of the business owners to raise the prices.
If there’s more money circulating, there’s more businesses can ask for.
Only if that money goes to the working people who can in turn spend it. If the money stays at the top then it does not result in increased spending power. Most of the money that was created did not end up in the hands of the people who are spending it day to day. Bulk of the money went to the oligarchs, you get that right?
Do you think they weren’t greedy before? Do you think it’s a coincidence this inflation happened the same time the Fed suddenly pumped trillions into the money supply?
I think they saw an opportunity to jack up prices. In fact, we see this happen any time there’s a disaster, no money printing is needed here. There’s even a term for this: disaster capitalism.
You still haven’t explained what your thesis here is exactly. If capitalists aren’t raising wages then people don’t have more spending power no matter how much money is printed. What you still haven’t established here is how there’s more money circulating in the economy when wages have remained stagnant. Nobody is arguing that the oligarchs aren’t benefiting from the QE, but it’s not a direct cause of inflation.
Ok, but capitalists aren’t the ones primarily consuming basic goods they raise the prices on. We’re talking about consumer inflation here. An oligarch getting a big cash infusion and buying up land or hiring servers isn’t affecting the prices of consumer goods.
Workers, and people selling land, and so on shifted from selling their time and resources to regular people, to serving oligarchs. They do this, because those oligarchs have more money now.
That still doesn’t change the formula for inflation which is the relative cost of goods and services to salaries.
Then the money supply is inflated, and now $10 is circulating, but there’s still only 5 items for sale.
And who decides that it’s now circulating for $10? The business owner decides that, which was my original point all along!
Meanwhile, your example is too simplistic because there isn’t $10 circulating since economy isn’t homogeneous. People consuming regular goods who are affected by inflation didn’t get a chunk of the new money printed, so they have exact same spending power they did when there was $5 circulating.
If there’s more money, with the same supply of goods, price have to increase.
They don’t have to increase, people who own businesses make a conscious decision to increase them. You’re also conflating the amount of money in circulation with purchasing power here.
Printing money doesn’t magically let people buy more than exists.
If they buy up land, you need to pay more to get some of your own. Or you pay more to rent some of your own.
This doesn’t apply to vast majority of the population who don’t actually own any land.
If they hire workers who would otherwise be making and servicing consumer goods, it will be harder to get reliable goods. Fixing that will mean paying a premium to reattract workers.
Are you saying companies wouldn’t want to produce and sell more goods if there was demand for them?
No, they don’t. The Fed chooses how much money circulates.
More money in circulation does not magically make prices increase, people who own businesses choose on what they charge. Increase in money supply also doesn’t translate into decreased purchasing power all on its own.
Again, whoever gets the money and spends it will be using that money to computer for labor, land, and raw materials.
Again, the types of goods that oligarchs consume are not the same goods that regular people consume.
The fact that oligarchs buy different things doesn’t matter, they take up many forms of resources that would otherwise be allocated to the regular person.
That’s nonsensical, if you’re buying up all the oranges in town and I eat apples, the scarcity of oranges has no effect on me.
Purchasing power is directly tied to the money circulating.
No, it’s not.
If the money supply contracts there’s more competition for the remaining money. If it expands, each dollar is less important.
LMAO, financial economy isn’t some money pit that people dive into and grab as much as they can. Working people get money from their wages, and their wages don’t magically increase when the money supply is increased.
Yeah this is not really what’s happening. QE went on for a long time before inflation really took off and mostly served to inflate asset prices without any meaningful effect on the price of consumer goods. As has been said, this is because that’s where the lion’s share of rich people’s money goes.
I think the key data point here is the increase in profits recently. Which would not be happening if this was all down to bog standard supply and demand throughout supply chains. Parking money in assets like stocks and real estate doesn’t cause consumer price inflation. But if businesses all realized that the talk of supply chain disruptions and COVID causing prices to go up was a good excuse to raise prices further together, that would exacerbate an otherwise minor bout of consumer price inflation. Which is exactly what happened.
And although it’s pretty damn close to collusion/price fixing in many cases, there is no real enforcement against that sort of thing. There is software that is used throughout industries that basically does the price fixing for you using data from other users/firms. Makes it easy and plausibly deniable because it was just an algorithm that told you to do it. Big part of rent inflation in particular. If there’s no competitor willing to undercut you, even though they could, the Econ 101 bullshit doesn’t really apply. It’s basically just class solidarity among capitalists. Circling the wagons because unusual circumstances temporarily drove wages up, and they weren’t having it.
Anyway, the main point is, if profit rates are going up, it’s not money supply causing the inflation.
I feel like we’re just going in circles here. Unless workers get higher wages, their capacity to pay rent does not change.
I’m saying they will need to spend more to get land/labor/raw materials.
And that doesn’t change the situation for the workers in any way because their wages are not rising.
It’s not magic, currency represent wealth. If the wealth stays the same, and the amount of currency goes up then each unit of currency has less purchasing power.
Currency does not represent wealth, and if anything currency only impacts financial wealth. When currency starts depreciating in value then people who own significant portion of financial wealth simply transfer it into physical assets or move it to other currencies. All this has little to do with internal inflation mechanics of the country.
Are you going to ignore that a 4th time now and just repeat the same line?
I didn’t ignore this, I’ve addressed this multiple times in my replies. I’ll address it for the 4th time I guess. Capitalists spending more on land/labor/raw materials does not translate into increased wages or increased spending power of the workers. Let me know if you need me to clarify that further for you.
So yes, eating different food still bids up prices.
You evidently missed the point being made.
Any economist would disagree with you. This is hardly a controversial idea in academics.
How many people agree with an idea says nothing about the merit of the idea. Plenty of western economists agree that neoliberal economics work and that you can do QE indefinitely.
When the total resources stay the same, but the currency representing that wealth is inflated, the price of everything goes up.
Once again, prices go up as a result of people who own businesses choosing to raise them. It’s incredible that you continue to refuse to acknowledge this simple fact.
There was a brief period when people got direct cash during the pandemic which businesses used as an excuse to hike up prices. However, once again, it was the choice of the business owners to raise the prices.
Only if that money goes to the working people who can in turn spend it. If the money stays at the top then it does not result in increased spending power. Most of the money that was created did not end up in the hands of the people who are spending it day to day. Bulk of the money went to the oligarchs, you get that right?
I think they saw an opportunity to jack up prices. In fact, we see this happen any time there’s a disaster, no money printing is needed here. There’s even a term for this: disaster capitalism.
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You still haven’t explained what your thesis here is exactly. If capitalists aren’t raising wages then people don’t have more spending power no matter how much money is printed. What you still haven’t established here is how there’s more money circulating in the economy when wages have remained stagnant. Nobody is arguing that the oligarchs aren’t benefiting from the QE, but it’s not a direct cause of inflation.
deleted by creator
Ok, but capitalists aren’t the ones primarily consuming basic goods they raise the prices on. We’re talking about consumer inflation here. An oligarch getting a big cash infusion and buying up land or hiring servers isn’t affecting the prices of consumer goods.
That still doesn’t change the formula for inflation which is the relative cost of goods and services to salaries.
And who decides that it’s now circulating for $10? The business owner decides that, which was my original point all along!
Meanwhile, your example is too simplistic because there isn’t $10 circulating since economy isn’t homogeneous. People consuming regular goods who are affected by inflation didn’t get a chunk of the new money printed, so they have exact same spending power they did when there was $5 circulating.
They don’t have to increase, people who own businesses make a conscious decision to increase them. You’re also conflating the amount of money in circulation with purchasing power here.
We’re in complete agreement here.
deleted by creator
This doesn’t apply to vast majority of the population who don’t actually own any land.
Are you saying companies wouldn’t want to produce and sell more goods if there was demand for them?
More money in circulation does not magically make prices increase, people who own businesses choose on what they charge. Increase in money supply also doesn’t translate into decreased purchasing power all on its own.
Again, the types of goods that oligarchs consume are not the same goods that regular people consume.
That’s nonsensical, if you’re buying up all the oranges in town and I eat apples, the scarcity of oranges has no effect on me.
No, it’s not.
LMAO, financial economy isn’t some money pit that people dive into and grab as much as they can. Working people get money from their wages, and their wages don’t magically increase when the money supply is increased.
deleted by creator
Yeah this is not really what’s happening. QE went on for a long time before inflation really took off and mostly served to inflate asset prices without any meaningful effect on the price of consumer goods. As has been said, this is because that’s where the lion’s share of rich people’s money goes.
I think the key data point here is the increase in profits recently. Which would not be happening if this was all down to bog standard supply and demand throughout supply chains. Parking money in assets like stocks and real estate doesn’t cause consumer price inflation. But if businesses all realized that the talk of supply chain disruptions and COVID causing prices to go up was a good excuse to raise prices further together, that would exacerbate an otherwise minor bout of consumer price inflation. Which is exactly what happened.
And although it’s pretty damn close to collusion/price fixing in many cases, there is no real enforcement against that sort of thing. There is software that is used throughout industries that basically does the price fixing for you using data from other users/firms. Makes it easy and plausibly deniable because it was just an algorithm that told you to do it. Big part of rent inflation in particular. If there’s no competitor willing to undercut you, even though they could, the Econ 101 bullshit doesn’t really apply. It’s basically just class solidarity among capitalists. Circling the wagons because unusual circumstances temporarily drove wages up, and they weren’t having it.
Anyway, the main point is, if profit rates are going up, it’s not money supply causing the inflation.
I feel like we’re just going in circles here. Unless workers get higher wages, their capacity to pay rent does not change.
And that doesn’t change the situation for the workers in any way because their wages are not rising.
Currency does not represent wealth, and if anything currency only impacts financial wealth. When currency starts depreciating in value then people who own significant portion of financial wealth simply transfer it into physical assets or move it to other currencies. All this has little to do with internal inflation mechanics of the country.
I didn’t ignore this, I’ve addressed this multiple times in my replies. I’ll address it for the 4th time I guess. Capitalists spending more on land/labor/raw materials does not translate into increased wages or increased spending power of the workers. Let me know if you need me to clarify that further for you.
You evidently missed the point being made.
How many people agree with an idea says nothing about the merit of the idea. Plenty of western economists agree that neoliberal economics work and that you can do QE indefinitely.
Once again, prices go up as a result of people who own businesses choosing to raise them. It’s incredible that you continue to refuse to acknowledge this simple fact.
Finally, since you clearly just ignore what I say, maybe you can listen to an economist explain this instead https://www.youtube.com/watch?v=RH1tT4NW8NI