@[email protected] to [email protected] • 2 years 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-square160fedilinkarrow-up1468
arrow-up1452imageHow 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.com@[email protected] to [email protected] • 2 years agomessage-square160fedilink
minus-square@[email protected]linkfedilinkEnglish11•2 years ago This can mainly be caused by two things: You forgot expansion of the money supply.
minus-square@[email protected]linkfedilinkEnglish5•2 years 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-square@[email protected]linkfedilinkEnglish-4•2 years 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-square@[email protected]linkfedilinkEnglish9•2 years agoHow much does the money supply go up by? It can’t really count as supplied if it’s locked in a safe.
minus-square@[email protected]linkfedilinkEnglish2•2 years 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.