Melatonin@lemmy.dbzer0.com to Asklemmy@lemmy.ml · 11 months agoHow come we experience so much more inflation than deflation? in other words, why does our buying power decrease far more often than it increases?lemmy.dbzer0.comimagemessage-square161fedilinkarrow-up1469arrow-down116
arrow-up1453arrow-down1imageHow come we experience so much more inflation than deflation? in other words, why does our buying power decrease far more often than it increases?lemmy.dbzer0.comMelatonin@lemmy.dbzer0.com to Asklemmy@lemmy.ml · 11 months agomessage-square161fedilink
minus-squareintensely_human@lemm.eelinkfedilinkEnglisharrow-up16arrow-down5·11 months ago This can mainly be caused by two things: You forgot expansion of the money supply.
minus-squareungoogleable@lemmy.mllinkfedilinkEnglisharrow-up9arrow-down4·11 months agoIncrease in the money supply does not in itself cause prices to go up. There’s an indirect mechanicism but it’s not automatic.
minus-squareagarorn@feddit.delinkfedilinkEnglisharrow-up3arrow-down7·11 months agoTell me: if the Fed prints a one quadrillion dollar bill but looks it into a safe so that nobody can ever use it. How much inflation do we get?
minus-squareplanish@sh.itjust.workslinkfedilinkEnglisharrow-up10arrow-down1·11 months agoHow much does the money supply go up by? It can’t really count as supplied if it’s locked in a safe.
minus-squareagarorn@feddit.delinkfedilinkEnglisharrow-up3arrow-down1·11 months agoAha. So the sheer amount of money is not important? Just, as if the circulation speed is the crucial point. Damn. Good for you for noticing.
You forgot expansion of the money supply.
Increase in the money supply does not in itself cause prices to go up. There’s an indirect mechanicism but it’s not automatic.
Tell me: if the Fed prints a one quadrillion dollar bill but looks it into a safe so that nobody can ever use it. How much inflation do we get?
How much does the money supply go up by? It can’t really count as supplied if it’s locked in a safe.
Aha. So the sheer amount of money is not important?
Just, as if the circulation speed is the crucial point. Damn. Good for you for noticing.