Melatonin@lemmy.dbzer0.com to Asklemmy@lemmy.ml · 1 year 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-square156fedilinkarrow-up1468
arrow-up1468imageHow 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 · 1 year agomessage-square156fedilink
minus-squareintensely_human@lemm.eelinkfedilinkEnglisharrow-up16·1 year ago This can mainly be caused by two things: You forgot expansion of the money supply.
minus-squareungoogleable@lemmy.mllinkfedilinkEnglisharrow-up8·1 year 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-up2·1 year 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-up9·1 year 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-up2·1 year 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.