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...
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.
If capitalists aren’t raising wages then people don’t have more spending power no matter how much money is printed.
I’m not saying regular people have it, I’m saying the capitalists have more money to spend from the government.
You don’t just have to compete with the money the other members of the 99% have, you have to compete with the spending from capitalists who want land and labor to themselves.
If an oligarch gets a big cash infusion, and starts buying up land and hiring servants that land and those workers won’t be there for regular people. Regular people now have more competition when buying land and finding other workers to hire.
What you still haven’t established here is how there’s more money circulating in the economy when wages have remained stagnant.
The total money in circulation is calculated by the Fed, and that amount has gone up. The total dollars isn’t subjective, it’s a number that you can look up.
Infamously, that number spiked during the COVID crisis. But it was given mostly to oligarchs, who use that money to buy things.
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.
Nobody is arguing that the oligarchs aren’t benefiting from the QE, but it’s not a direct cause of inflation.
Let’s keep it really simple. There are 5 items for sale in a microeconomy, and $5 total circulating. An item sells for $1.
Then the money supply is inflated, and now $10 is circulating, but there’s still only 5 items for sale.
Would you expect that someone could take $10 and buy 10 items since the pricewas $1 each before? Of course not, because you can’t buy 10 if only 5 are for sale.
The only way the market can adapt is by increasing prices.
The real economy is much bigger, with more goods and cash, but the fundamental principle is the same. If there’s more money, with the same supply of goods, price have to increase. Printing money doesn’t magically let people buy more than exists.
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.
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.
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.
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.
That still doesn’t change the formula for inflation which is the relative cost of goods and services to salaries
The relative cost of goods/services to salaries is a function of the underlying money supply.
And who decides that it’s now circulating for $10? The business owner decides that, which was my original point all along!
No, they don’t. The Fed chooses how much money circulates.
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.
Again, whoever gets the money and spends it will be using that money to computer for labor, land, and raw materials.
Metal for their boat doesn’t go to a toaster. Or a repairman working on their new car has that career, instead of being a nurse for a working-class person. The land they buy goes off the market, raising prices on remaining land.
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.
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.
Purchasing power is directly tied to the money circulating.
If the money supply contracts there’s more competition for the remaining money. If it expands, each dollar is less important.
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.
This doesn’t apply to vast majority of the population who don’t actually own any land.
Did you miss the word “rent” there?
Are you saying companies wouldn’t want to produce and sell more goods if there was demand for them?
I’m saying they will need to spend more to get land/labor/raw materials.
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.
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.
Again, the types of goods that oligarchs consume are not the same goods that regular people consume.
You’ve said that multiple times, and multiple times ignored the part where I say:
It doesn’t matter. Consuming different foods still bids up the price of land/labor/raw materials.
Are you going to ignore that a 4th time now and just repeat the same line?
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.
Agricultural labor is fungible.
Arable land can be used for either crop.
Grocers need to use land/labor to sell goods, regardless of what fruit you came in for.
So yes, eating different food still bids up prices.
No, it’s not.
Any economist would disagree with you. This is hardly a controversial idea in academics.
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.
When the total resources stay the same, but the currency representing that wealth is inflated, the price of everything goes up.
Unfortunately, the regulations around wages doesn’t keep up, and wages often do rise slower than overall inflation.
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.
I feel like we’re just going in circles here. Unless workers get higher wages, their capacity to pay rent does not change.
If housing supply contracts because the increase in the money supply is used by the rich to purchase real estate, then it does raise the market price for the remaining apartments.
So people sacrifice a luxury if they have one, or they add roommates, or get less picky about amenities.
And that doesn’t change the situation for the workers in any way because their wages are not rising.
We’ve been over this so many times. The workers don’t need to have money, for money to get spent in the economy.
One billionare could have an outsized impact on new cash in the system as they take their new money and reallocate land, labor, and raw materials from projects benefiting the masses to projects benefiting them.
What this looks like for the worker is shortages and higher prices. Land owners and employees want to rent to and work for the people who actually have some cash to spend. If you want to keep getting a good or service you now need to offer more money- that’s inflation.
Currency does not represent wealth
That’s literally the entire point. It’s a store of value. Not the paper itself, but what you expect to trade it for.
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.
Currency depreciating has little to do with inflation mechanics? 🤔
When all those people transfer their liquid cash into hard assets, it bids the price up. If they are doing it because the currency has been depreciating, and this trigger many people to bid up prices (more dollars necessary, i.e. depreciation/inflation) then you are talking about runaway inflation.
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.
I never said it had to result in higher wages, as long as someone (the billionaire) is spending money then prices will begin to climb.
If you don’t have the wages to buy it, it can still go up. Simply because you need more money to attract inputs to producing anything at all.
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.
Except this is accepted among all schools. Even modern monetary theorists say you need taxation of equal proportion to offset increases in the money supply.
Do any published Marxists even claim you can increase the money supply without inflation? I haven’t heard of them.
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
Once again, if it were that simple why didn’t they do it before the money supply was inflated?
Businesses were greedy and tried it before, but there were limits to how much they could charge and still expect sales.
Pumping trillions in meant that it took more to compete against the new money, and that someone ended up with the money being spent and did the same things themselves.
You can’t have twice as much being spent, and expect each dollar to buy the same amount of stuff. For that to be possible, you’d need twice as much stuff. If prices are the same as before, and people start spending money, inventory would be cleared out.
You’re expecting a market to just act like nothing has happened when there’s suddenly
We really are going in circles here. However, one thing I will point out is that billionaires didn’t lack liquid assets to buy up things like housing before money printing started. What facilitated that was the fact that lots of people ended up becoming insolvent during the pandemic. Businesses went under, people weren’t able to afford their mortgages, and so on. This forced people to put their assets up on the market at which point the billionaires started buying them up.
For money printing to affect general spending, the money has to go to regular people. There was a brief period during the start of the pandemic when that happened, and that did end up heating up the economy briefly. That’s when a lot of the inflation happened because businesses realized they could now jack up prices since people had cash to spend.
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.
I’m not saying regular people have it, I’m saying the capitalists have more money to spend from the government.
You don’t just have to compete with the money the other members of the 99% have, you have to compete with the spending from capitalists who want land and labor to themselves.
If an oligarch gets a big cash infusion, and starts buying up land and hiring servants that land and those workers won’t be there for regular people. Regular people now have more competition when buying land and finding other workers to hire.
The total money in circulation is calculated by the Fed, and that amount has gone up. The total dollars isn’t subjective, it’s a number that you can look up.
Infamously, that number spiked during the COVID crisis. But it was given mostly to oligarchs, who use that money to buy things.
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.
Let’s keep it really simple. There are 5 items for sale in a microeconomy, and $5 total circulating. An item sells for $1.
Then the money supply is inflated, and now $10 is circulating, but there’s still only 5 items for sale.
Would you expect that someone could take $10 and buy 10 items since the pricewas $1 each before? Of course not, because you can’t buy 10 if only 5 are for sale.
The only way the market can adapt is by increasing prices.
The real economy is much bigger, with more goods and cash, but the fundamental principle is the same. If there’s more money, with the same supply of goods, price have to increase. Printing money doesn’t magically let people buy more than exists.
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.
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.
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.
The relative cost of goods/services to salaries is a function of the underlying money supply.
No, they don’t. The Fed chooses how much money circulates.
Again, whoever gets the money and spends it will be using that money to computer for labor, land, and raw materials.
Metal for their boat doesn’t go to a toaster. Or a repairman working on their new car has that career, instead of being a nurse for a working-class person. The land they buy goes off the market, raising prices on remaining land.
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.
Purchasing power is directly tied to the money circulating.
If the money supply contracts there’s more competition for the remaining money. If it expands, each dollar is less important.
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.
Did you miss the word “rent” there?
I’m saying they will need to spend more to get land/labor/raw materials.
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.
You’ve said that multiple times, and multiple times ignored the part where I say:
It doesn’t matter. Consuming different foods still bids up the price of land/labor/raw materials.
Are you going to ignore that a 4th time now and just repeat the same line?
Agricultural labor is fungible.
Arable land can be used for either crop.
Grocers need to use land/labor to sell goods, regardless of what fruit you came in for.
So yes, eating different food still bids up prices.
Any economist would disagree with you. This is hardly a controversial idea in academics.
When the total resources stay the same, but the currency representing that wealth is inflated, the price of everything goes up.
Unfortunately, the regulations around wages doesn’t keep up, and wages often do rise slower than overall inflation.
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
If housing supply contracts because the increase in the money supply is used by the rich to purchase real estate, then it does raise the market price for the remaining apartments.
So people sacrifice a luxury if they have one, or they add roommates, or get less picky about amenities.
We’ve been over this so many times. The workers don’t need to have money, for money to get spent in the economy.
One billionare could have an outsized impact on new cash in the system as they take their new money and reallocate land, labor, and raw materials from projects benefiting the masses to projects benefiting them.
What this looks like for the worker is shortages and higher prices. Land owners and employees want to rent to and work for the people who actually have some cash to spend. If you want to keep getting a good or service you now need to offer more money- that’s inflation.
That’s literally the entire point. It’s a store of value. Not the paper itself, but what you expect to trade it for.
Currency depreciating has little to do with inflation mechanics? 🤔
When all those people transfer their liquid cash into hard assets, it bids the price up. If they are doing it because the currency has been depreciating, and this trigger many people to bid up prices (more dollars necessary, i.e. depreciation/inflation) then you are talking about runaway inflation.
I never said it had to result in higher wages, as long as someone (the billionaire) is spending money then prices will begin to climb.
If you don’t have the wages to buy it, it can still go up. Simply because you need more money to attract inputs to producing anything at all.
Except this is accepted among all schools. Even modern monetary theorists say you need taxation of equal proportion to offset increases in the money supply.
Do any published Marxists even claim you can increase the money supply without inflation? I haven’t heard of them.
Once again, if it were that simple why didn’t they do it before the money supply was inflated?
Businesses were greedy and tried it before, but there were limits to how much they could charge and still expect sales.
Pumping trillions in meant that it took more to compete against the new money, and that someone ended up with the money being spent and did the same things themselves.
You can’t have twice as much being spent, and expect each dollar to buy the same amount of stuff. For that to be possible, you’d need twice as much stuff. If prices are the same as before, and people start spending money, inventory would be cleared out.
You’re expecting a market to just act like nothing has happened when there’s suddenly
We really are going in circles here. However, one thing I will point out is that billionaires didn’t lack liquid assets to buy up things like housing before money printing started. What facilitated that was the fact that lots of people ended up becoming insolvent during the pandemic. Businesses went under, people weren’t able to afford their mortgages, and so on. This forced people to put their assets up on the market at which point the billionaires started buying them up.
For money printing to affect general spending, the money has to go to regular people. There was a brief period during the start of the pandemic when that happened, and that did end up heating up the economy briefly. That’s when a lot of the inflation happened because businesses realized they could now jack up prices since people had cash to spend.