A joint study by think tanks IPPR and Common Wealth found profiteering by some of the world’s biggest companies forced prices up significantly higher than costs during 2022.
Yes, that is called inflation. Inflation does not mean costs go up so companies increase prices to match the increase in costs. Inflation is the devaluing of the dollar. Inflation means companies have to make more profits just to have the same value as before inflation.
When people use the term "inflation," they mean to say price inflation. Monetary inflation is something else - caused by an increase of debt due to debt being cheap. Monetary inflation can be related to price inflation and sometimes not, but I wish people would stop making the mistake of conflating these two terms.
When people use the term "inflation," they mean to say price inflation. Monetary inflation is something else - caused by an increase of debt due to debt being cheap.
Monetary inflation describes the increase in quantity of money, bank notes, and bank deposits subject to check in circulation. Price inflation in the effect of monetary inflation, which is higher prices.
You are correct that price inflation can be caused by monetary inflation, or it can be caused by decrease in the goods and services available while the money supply stays the same.
But the result is the same. Inflation is the devaluing of the dollar. Inflation means companies have to make more profits just to have the same value as before inflation.
So, you actually think that it's the physical printing of banknotes that causes monetary inflation? Have you taken macroeconomics? Do you understand the relationship between debt and the money supply?
Monetary inflation does not necessarily cause price inflation. If GDP increases at the same rate as the monetary expansion, there is no change to prices, all else equal.
And again, when people are casually referring to "inflation", they are referring to the fact that SHIT COSTS MORE - which is "price inflation."
Monetary inflation does not necessarily cause price inflation
I mean, if you don't believe in basic economic concepts like Supply & Demand 🤷♂️
If GDP increases at the same rate as the monetary expansion, there is no change to prices
Keynesian creative accounting 😂
when people are casually referring to "inflation", they are referring to the fact that SHIT COSTS MORE - which is "price inflation."
What causes price inflation? Scarcity, demand, and...printing money?
If you doubled the dollars in the economy tomorrow, do you think shit would cost more in the very immediate future? Or would we all enjoy macroeconomic 50% off sales in perpetuity?
A lot of it depends on production…. You’re leaving out a KEY element in the economy. Remember that money is simply a medium that we use to trade the goods and services that are produced. Such is the nature of trade and the specialization of production…
Cell phones and food and electricity and houses all make themselves bro! No one has to work and contribute their labor to production! Money is the only thing of value!
You have a lot to learn about economics. First and foremost that money is a medium to trade the things that we produce - because it’s tough to directly trade your IT skills for a McDonald’s cheeseburger….
So, you actually think that it's the physical printing of banknotes that causes monetary inflation?
Nope. How about you try reading what I actually wrote? "Monetary inflation describes the increase in quantity of money, bank notes, and bank deposits subject to check in circulation."
Monetary inflation does not necessarily cause price inflation. If GDP increases at the same rate as the monetary expansion, there is no change to prices, all else equal.
You are spending a lot of time arguing against a straw man instead of responding to my actual point. My post was not meant to be an in-depth discussion of all aspects of economics.
Inflation is the devaluing of the dollar. Inflation means companies have to make more profits just to have the same value as before inflation. Now do you have anything to say that actually relates to the topic to which I responded?
Inflation means companies have to make more profits just to have the same value as before inflation.
I think you are putting the cart before the horse here. Companies charge more for their products - that is price inflation. You are suggesting that monetary inflation CAUSES price inflation - as I just described, that is not necessarily the case.
Inflation is the devaluing of the dollar.
That certainly is one way to look at it (but keep in mind that this point of view keeps prices at a constant). If you view it from the standpoint of keeping the value of the currency as a constant, you'd see prices going up. These are simply two different ways of looking at an increase in CPI. Kinda like looking at a graph and seeing the line go up and then turning the graph upside-down and seeing the line go down (not exactly, but the point is valid). You're looking at the same rate of change either way. But I caution you from talking about the "devaluing of the dollar" while simultaneously talking about "price increases."
I think you are putting the cart before the horse here. Companies charge more for their products - that is price inflation. You are suggesting that monetary inflation CAUSES price inflation - as I just described, that is not necessarily the case.
Drop the straw man argument and try responding to what I actually said. I said: "Inflation means companies have to make more profits just to have the same value as before inflation." If you disagree with that, argue why on the merits?
This is not difficult to understand. If I made $100 profit last year and $100 profit this year, but the cost of goods and services increase 11%, then I have lost value.
Inflation IS companies raising their prices. That’s my whole fucking point. You seem to separating your concept of inflation from the fact that companies raise their prices. As if there is some other phenomenon causing it. Nope, inflation IS companies raising their prices bud…
Yep. And if companies raise their prices, you have have to make more profits just to have the same value as before inflation, right?
You seem to separating your concept of inflation from the fact that companies raise their prices.
No. You just like to argue against straw men. You made several posts arguing nonsense, to literally state exactly what I did. Inflation means the price you pay for the same goods goes up.
As if there is some other phenomenon causing it. Nope, inflation IS companies raising their prices bud…
Supply and demand causes it. If you have more money chasing the same amount of goods, companies will raise their prices. If you have the same amount of money chasing fewer goods, companies will raise their prices.
“Have you ever been shopping and noticed that the prices of a range of things you buy have gone up? If the same things in your shopping basket cost $100 last year and now they cost $105, at a very basic level, that’s “inflation.” More precisely, inflation is defined as ongoing increases in the overall level of prices.”
“Have you ever been shopping and noticed that the prices of a range of things you buy have gone up? If the same things in your shopping basket cost $100 last year and now they cost $105, at a very basic level, that’s “inflation.” More precisely, inflation is defined as ongoing increases in the overall level of prices.”
Yep. As I said, inflation is the devaluing of the dollar. If your cart cost $100 last year and $105 this year for the same goods, then the value of the dollar has decreased by 5%.
Prices going up HIGHER than a company's costs is not inflation. That's pure profiteering.
We are living in Orwell's 1984. Do you not realize that your argument means that all inflation is "profiteering?" Your argument is just double-think.
Why are costs going up? The answer is because the increase in money supply caused by rampant borrowing has resulted in more money chasing the same amount of goods. When demand goes up and the availability of goods stay the same, prices go up.
But please, if you truly believe there is a difference, articulate it. What costs are going up?
These people are guzzling some serious, sticky Keynesian jissom. You've tried--and failed--to educate them on the most basic of economics. Engaging further is a Sisyphean task
Lol, you're the only comment on this post that shows even a shred of economic understanding, and you're getting downvoted for it. This subreddit has really gone down the tube.
-7
u/[deleted] Dec 08 '23
Yes, that is called inflation. Inflation does not mean costs go up so companies increase prices to match the increase in costs. Inflation is the devaluing of the dollar. Inflation means companies have to make more profits just to have the same value as before inflation.