hexi [they/them]

fiat money has no intrinsic value. Doubling or tripling the supply doesn’t change it’s value. Halving it doesn’t make it suddenly more valuable.

If you double the currency, and each dollar has the same value, then you’ve doubled the total value available to each person

Of course that’s nonsense, money printing doesn’t create value.

So the only way to actually make it make sense is that the total value stays the same, and doubling the currency means each unit has half the value it did before.

How do you think each dollar can have the same value if there’s twice as much? That would mean there’s more value just from money printing, which again, is nonsense.

Have you read Capital? It goes through money and velocity pretty thoroughly early on and I think addresses some pretty big assumptions econ classes tend to present.

I’ve read volume 1, and Marx doesn’t imply you can print more money and keep the purchasing power the same after.

Which you can still do with online classes.

The money they pay for the stocks goes to the person who had it before, that’s how this money flows into the economy. That person then spends the money on something, that was the point in selling.

Math can be easily tested, if they can pass a calculus and algebra test that is comprehensive, why would I care how they learned it?

If a rich person gets money, what evidence do you have that they would spend it or invest it?

Is this your argument, that the stimulus of trillions of dollars has no effect because they just sit on it?

The whole reason for the program is to give the recipients more y to spend, not just shits and giggles. Even if they just deposited it into a bank account, the bank reinvests the money into stocks, bonds, and loans.

There is evidence, if you really need to see the numbers, the FRED website tracks the exact money supply, including reinvested deposits.

Capitalists are middle men who sell our labor + a product back to us at a higher price. If they don’t need cash right now, they will raise prices and sell fewer units at a higher rate to maximize the margin (on durable goods).

If you could just raise prices and make more money, they wouldn’t have kept inflation to 2% for decades.

Raising prices can reduced volume and lose money, so businesses limit it. Recently, the money circulating has increased, and businesses that raise prices can keep sales up.

Consider your labor and pretend you are fairly compensated right now. If the money supply increases, do you demand, or at least deserve, higher wages? If so, why?

Of course, because I want to keep getting the same share of the total credits that I did before. If I’m getting less of the pie then I’m getting a pay cut.

Imagine a microeconomy, a small isolated village. One day the local currency changes and you go from making 2% of the currency to 1%, but the absolute number doesn’t change. You still make 20 coins per day, but the total money supply has grown. That’s a paycut in purchasing power.

The entire point of giving one group more % the money supply is so that they can command more of the resources that currency trades for. To think they just do that for no reason is naive.

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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

If I got a trillion dollars printed and did nothing with it, no change in inflation. If I deposit it at banks, there would probably be some knock on effects on interest rates that make their way to the broader system.

The rich are spending the money, and just because regular people don’t buy yachts doesn’t change the fact that this reallocates labor, land, and raw materials from benefiting the regular person to benefiting the billionaire.

Even if they choose not to spend it, it would be invested into some other assets that do command resources in the economy. They buy stocks, raising the price, followed by the company liquidating stock value to fund expansion, which bids up the prices of inputs.

Medical professions have hands-on training that can’t be replaced online.

You can get a teaching degree or an engineering entirely online, do you think those are not legitimate?

If someone can pass a calculus test after watching YouTube videos and doing practice tests, why should that count for anything less than someone who got the same score on a test from in-person courses?

Remote learning became a lot more common during COVID, like it or not, it’s becoming normal. Unfortunately, test scores only count if you pay a lot for those courses. Free MOOCs teaching and testing the same content will not count, even if afterwards the people passing can demonstrate the same exact knowledge.

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.

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.

Anyone with an economics background would agree that the money supply increasing will cause inflation if there isn’t a corresponding increase in the supply of goods/services.

How else could it work? People print money and somehow just buy more stuff consequence-free?

Colleges act like Scientology in the states. Equating education with how much money you’ve handed them.

Meanwhile anything can be learned online, but it counts for nothing because corporations treat purchases credentials as the only legitimate form of “education”.

If half of teens are saying it, then it sounds like a lot of people did listen.

As a millennial, this sentiment is common among my peers too.

Yes, I agree.

The US could export it’s inflation, and many countries have just agreed to use the dollar less at the same time the US has rapidly increased its money supply.

Combine that with a debt-to-GDP ratio that hasn’t been this high since WW2 and you have the perfect storm for an economic collapse.

It should go without saying that if you have people already on the edge, and suddenly the entire economic system starts to crack there is going to be violence. Likely a war as the US tries to save itself rather than passively sliding into financial ruin.

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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.

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.

The cash regular people got was a fraction given to the capital class through Fed stimulus and PPP.

All three of these together means there’s more money flowing. If businesses didn’t increase their nominal prices, they’d in effect be lowering the real prices because the old price is suddenly a much smaller share of the total currency.

Even if all businesses tried this, there would be supply shortages because the amount of spending power would be more than the goods being sold.

Only if that money goes to the working people who can in turn spend it.

No because the inputs for what regular people need (like labor, land, or raw materials) are also something the wealthy want. They’d like people to use these resources for their own use.

If the inputs are all going to the rich, the working class has to spend more to bid for these now.

Someone building affordable housing might follow the money and switch to building yacht interiors because the rich have more to spend now.

The worker has to pay more to get them to come back to working for the regular person.

Bulk of the money went to the oligarchs, you get that right?

When an oligarch can hire more people, and hoards raw materials, where do you think that comes from?

Everything extra they can buy now comes at the expense of the workers.

Workers get outbid for the labor of others, or land, because an oligarch is buying more.

I think they saw an opportunity to jack up prices.

And that opportunity was an increase to the amount of money circulating.

Ah yes econ101, taking a complex and interconnected system that we don’t fully understand, boiling it down to its simplest and most incorrect model.

Your issue with economics is that it says the ratio of currency to goods affects prices?

If prices didn’t have to go up, then increasing the money ey supply would somehow magically increase wealth because you could just use the printed money to get more goods.

Obviously printing more money doesn’t make more goods pop into

existence, so something else has to happen. That other thing is called inflation.

If prices didn’t go up, there would be shortages because some people would be walking around with more to spend. Then next the businesses would find they controlled a smaller % of currency, reducing their own buying power as other increased their prices.

This is a global issue, the fed pumping money shouldn’t have had a big an effect.

The Fed is the sole controller of the US money supply, and the US is the largest economy and the USD is held as a reserve currency for global trade.

My best guess would be a mix of covid money from many countries going to the rich increasing the wealth gap, gas and oil companies hiking prices because of Russia even though a lot of them have no link to Russian oil or gas and causing a knock on effect. You’ve also got a number of bubbles around the world such as housing and car loans, these are definitely caused by greed.

Greedy that always existed, but was enabled through recent events.

I agree with the Russian oil supplies being embargoed allowing greedy energy companies to charge more, but that is just one factor.

Money has no inherent value, it’s value comes from being accepted and how rare it is.

A simple formula is, if you doubled the money supply, each dollar would have half the spending power it did before.

Since money is just a paper that says you get to trade it for other things, the more circulating the higher prices will be.

Again, they have raised prices before. Inflation didn’t just start yesterday.

Rapid inflation did start at the same time the money supply was increased.

We always had inflation, but it’s false equivalence to act like the 1-2% from before is the same that we’ve seen over the past two years.

You still haven’t actually explained the causal chain between the increase in money supply and inflation

If there’s more money circulating, there’s more businesses can ask for.

Whoever has the extra cash that’s been created can spend more now, and businesses will charge more to those who can pay, rather than keep their old prices.

That’s ECON101, more money chasing the same supply of goods = prices increasing. After all, someone has more money now, and the point of having money is to get what you want.

So they spend the new cash, paying marked up rates because they can afford to now. Businesses realize they can ask for more, and now someone is willing to pay more than just a 2% increase, where before customers weren’t willing/able.

nor have you provided any counter argument to my point which provides a clear and direct explanation of what’s happening.

I asked you why inflation suddenly spiked, if businesses/capital always had this power. You made the false equivalence of the previous low inflation to the current high inflation.

If grocery bills were going up 2% a year for decades, and then suddenly start going up more than 10% a year, what happened?

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?