Re:Why inflation is not a threat
by throw0101a on Sunday March 14, 2021 @09:46AM
(#26455365)
Inflation is dependent on money supply and money velocity. And velocity has been going down for a decade or two (in the US) and recently dropped off a cliff:
* https://fred.stlouisfed.org/series/M2V
See also:
* https://en.wikipedia.org/wiki/Money_supply#Link_with_inflati...
Re:Why inflation is not a threat
by christophilus on Sunday March 14, 2021 @10:25AM
(#26455696)
Right. I think the op was suggesting that velocity would spike if the money made it to Main Street.
The only difference is that we call the former “inflation” and the latter “my stocks are doing well”. It’s all inflation in the end.
Re:Why inflation is not a threat
by imtringued on Sunday March 14, 2021 @03:58PM
(#26458422)
Well, the CPI is exclusively about consumer prices. It's not about savings vehicles like stocks.
But you are right. Wealth inequality is the cost of this form of monetary policy.
Re:Why inflation is not a threat
by goatinaboat on Sunday March 14, 2021 @09:35AM
(#26455281)
Economically speaking, increasing base money supply (giving money directly to people) does in fact increase inflation
Well, sure, if you give a bunch of people some money and they all decide to spend it on re-doing their homes at the same time then the prices charged by local tradesmen will probably go up, then correct themselves again when the peak demand passes. I'd argue that's not a bad thing in the sense that real work is being done, and the money is circulating in real goods and services - because if value is actually being created then there is something backing the new money.
Not sure if I personally subscribe to the above, but as long as we don’t experience collapse of currency/dollar and ensuing hyperinflation, we should be ok.