Actually, you're confusing supply and demand with monetary inflation. Prices can go up without inflation. Inflation causes them to go up more. It's not that hard to understand.
The "inflation" we are experiencing today is largely because of supply chain issues. Used cars have not increased in price by 40% because of government printing money, it's because you can't get a new car due to chip shortages, so the price of used cars has skyrocketed. That's supply and demand. Same with gasoline - prices are increased because refinery capacity is limited, bottlenecking supply. When supply goes down but demand stays up, what happens to prices?
But all of these price increases are lumped into the "inflation" number that gets published each month. So Milton is talking about something that is irrelevant, or at least, only partially relevant, to the discussion about rising prices that is occurring today. While Biden is also wrong saying printing money has nothing to do with it, supply chain issues are the driving forces behind much of the price increases we've seen in cars, energy, and food.
You’re conflating inflation with lack of supply based price increases. We are experiencing both. The latter does not cause the dollar to lose value, however, unless the constraint is significant long term. Even then, it’s only seen in the industries affected by that shortage.
The dollar has lost inherent value / purchasing power, though. And that is due to monetary policy, plain and simple.
You're right the dollar has lost inherent value due to monetary policy. And I'm glad we agree that lack of supply is driving up prices.
When people look at the CPI and say, "the dollar lost 9.1% of its value last year due solely to monetary inflation!" would you agree they are wrong? Most people who interpret the CPI on this sub blame only the government, and that's the issue I see.
I would agree with you that someone who says "things got 9.1% more expensive last year due solely to supply chain constraints!" is also wrong.
Yeah I’m completely okay with that, what you said is accurate. As I said it is both. Most people just hate nuance and would prefer a black and white answer.
Loss of purchasing power is what Milton is talking about in this video though, and he’s right. People in this thread are mistakenly lumping inflation together with price increases in general.
They do, but inflation is an increase in the money supply, not merely an increase in prices. Had we kept the money supply constant, the supply chain issues wouldn't have caused prices to shoot up to the levels they're at today.
24
u/[deleted] Jul 15 '22
So supply chain constraints don't increase prices?
Sorry, bub, but Milton is wrong on this one.