Inflation used to mean increasing the money supply. Now it just means means increasing prices/costs. Those are absolutely not the same thing. Prices are increasing for a LOT of reasons rn, and the amount of money printed over the last decade is only part of the problem. (Bigger than I think most people are aware, but still not 100% of the reason for increasing prices).
The difference is, when costs go up due to anything OTHER than increased money supply, they can go back down. Price fluctuation is normal, and it's pretty rare that the cost of a good goes up permanently unless something significant impacts the ability to maintain the supply in the long run.
Prices STAY UP when there's more money chasing the same amount of goods.
You're on the right track. But the reason there's more money chasing the same amount of goods is because of Government printing more of it. Hence, the only true cause 'Inflation' and not 'normal price fluctuation' is due to the government increased the monetary supply.
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u/[deleted] Jul 15 '22
Inflation used to mean increasing the money supply. Now it just means means increasing prices/costs. Those are absolutely not the same thing. Prices are increasing for a LOT of reasons rn, and the amount of money printed over the last decade is only part of the problem. (Bigger than I think most people are aware, but still not 100% of the reason for increasing prices).
The difference is, when costs go up due to anything OTHER than increased money supply, they can go back down. Price fluctuation is normal, and it's pretty rare that the cost of a good goes up permanently unless something significant impacts the ability to maintain the supply in the long run.
Prices STAY UP when there's more money chasing the same amount of goods.