1. When the monetary base is increased, that is monetary inflation. 2. When prices increase, that is price inflation. The two don't necessarily occur in unison. While the MB has increased about 4 times, price inflation will begin to occur as that new money begins to be put in circulation.
Government and the Fed can increase the MB creating monetary inflation, but price inflation occurs when product/services demand increases. Government, increases demand by providing the means to a large portion of the population to make purchases they could not afford otherwise. While it is true that "A rising tide lifts all boats", in reality it only applies to those that are seaworthy.
wrong of course!! with same demand and more money chasing same goods prices will rise causing inflation. 1+1=2
absurd and idiotic of course!! govt is not magical!!! Taking from one guy so he cant spend and giving to another so he can produces no new net demand. 1+1=2
If only everything was as simple as you appear to view it. True, 1+1=2 but what we're talking about is more like 0.05+0.003+0.12+0.3+0.44+1.04+0.047=2, and even that does not take everything into account. While the price of goods and services can rise and fall for various reasons, I feel it's undeniably true that an increase of the money supply leads to inflation eventually. It should be obvious that it does not have an immediate effect considering there is now more than 4 times the money in existence as was 8 years ago. No one claimed government to be magical. Government taking from one and giving to another results in spending which would not have occurred otherwise, which has the effect of increased demand on the producer allowing more product to be sold.
absurd of course since everyone spends or invests their money. Therefore when govt steals it and spends it there can be no net increase in spending. 1+1=2
What we have is protected high prices. The market is not being allowed to lower the cost of things that make up the bulk of most peoples' expenses. College costs are high, yet corps. hire Indians and Chinese who will work for much less since they don't have a heavy college expense from where they came. Socialist answer is to increase regulations that require more training, and subsidize the cost for those who can't afford it. This simply maintains high prices. Conservatism is supposed to allow market forces to lower the prices, but it ain't happening. Repubs. have failed in this area as well as Dems. Their solution is a 'college savings plan'. Yeah, right. How we gonna save? Housing Cheap Mexican labor has undercut wages in the construction industry. Do we save money on housing? NO! Repubs have failed to lower prices on housing, and Dems solution is to subsidize overpriced housing. Cars Some rinos complain about unions, but why is it jap cars built here without unions aren't any cheaper? You'd think we could save at least 30% on a Honda or Toyota. Utilities Some folks have used their brains to buy solar panels to get off the grid and supply much of their own power. But utility companies want to charge them a fee for not using enough of their power to support the grid infrastructure. The competition of home owner power should force the power companies to lower their prices, which would help everyone lower their monthly bills, giving them more disposable income for other things. Yes, both parties have failed on these issues and is why I support Trumps nationalism. It's what we need.
Can we all agree that the reality of inflation is that even with occasional pauses, our governments (Federal, State, and local) ability to survive massive indebtedness depends on it growing? Note that I am not claiming that inflation ensures survival, but only delays eventual collapse.
so when govt taxes money from a guy, who then cant spend it, spending increases???? See how liberals have no need to think whatsoever? Whatever they are told they simply repeat like little children.
1) its not inflation that insures survival its printing money which may or may not cause inflation 2) printing money masks problems, makes them bigger, and thus prevents a correction 3) therefore, printing money can cause an eventual collapse by preventing capitalism from self-correcting.
If inflation is bad, does it follow that deflation is good? Is it possible for any nation to absolutely prevent both inflation and deflation?
1) inflation and deflation are bad. The Fed is designed to prevent both. Do you know why inflation and deflation are bad?
So, you think the fed...the us gov... Can prevent inflation and deflation... Ie housing prices would never change, food and energy prices would never change, whether goods were in surplus or shortage, prices would not vary?
why do you doubt that the Fed can control inflation and deflation keeping in mind that both refer to changes in the general price level not the price level of specific goods and services?
Last time i checked... General prices are comprised of a lot of specific prices... With a big emphasis on food, energy and housing prices
It's a fact. Irrelevant to your false claim. It's been established that medieval Britain offered working people more leisure time and a higher standard of living than the factories of the Industrial Revolution. It was only in the 20th century that the condition of working people improved much over the way it had been before the Enclosures, and that was only because government intervened to make it so. - - - Updated - - - Only if you call bidding up the prices of each other's rent collection privileges "investing."
Energy, housing, food.... All big parts of cost of living, therefore impacting inflation, and all are market driven, and fundamentally outside gov control, and therefore it is i possible for the gov to fix prices, and therefore impossible for gov to have certain control of inflation
of course thats totally illiterate!! govt intervened in USSR Red China and East Germany and 120 million slowly starved to death!! Under capitalism you have to produce the best products and jobs possible just to survive. Now do you finally understand?
