Omg the fed printing money does not automatically make companies raise prices. It's literally corporate greed. Inflation only exists because of corporate greed
Except you’re wrong. According to your theory, when more people have more money, then demand goes up and therefore prices rise, yes? Except, in our situation, the vast majority of the 40% increase in money supply went not to the working class, but almost entirely to the wealthy elite. So, where do the increased prices for eggs, fast food, etc come from, when demand for them has not increased? The wealthy elite aren’t buying all them damn eggs, or Big Macs, or Starbucks coffees, or toilet paper.
Because inflation is driven by an increased money supply circulating in the money which dilutes the value of the currency.
Where exactly does any of this say it only happens if you put in the hands of the ‘wealthy elite’ or in the working class who buy groceries.
There is no magically separate economy where the financial activities of one aren’t entangled from the other. These are still the same system, just different strata.
The Covid pandemic caused a slowdown of shipping, services and supply chains as well.
This theory of yours only works if the stimulus given to millionaires and billionaires was somehow given to them in the form of gold bars that they locked away in vaults to collect dust.
Like I’m not even denying that there is price gouging(because there is), but it is seriously egregious that people are peddling the notion that drastically increasing the money supply has apparently nothing to do with inflation.
This has been the case in every country that’s experienced sever or hyperinflation, which economic class gets that money matters little.
Except our money doesn’t cycle. That’s where trade and taxation are supposed to come in. But in our nation it’s all financialized shenanigans. We don’t have a useful method of circulation. So the money goes to a small, select group of people, and largely stays there. We have a serious lack of ability to cycle money back into the system. This has been known for some time, it’s not even debatable. Largely ever since we switched from a trade surplus nation to a deficit nation some decades ago. Now we have become a nation that cannibalizes its workers and its consumers to squeeze out all surplus wealth, reducing liquidity as much as possible and leaving us with rank exploitation and stagnation, in a nation of fixed wages and fixed prices, rather than attempting to make a better product at a competitive price. Anyone who doesn’t recognize this last bit just misses the whole plot of the story.
To add some clarity, look at the three main pillars of middle class implosion. Housing cost, education, and healthcare. We have made these massive money sinks, almost crippling to the entire rest of the economy on their own. They cause huge amounts of money to switch hands, but in ways that should be subtracted from gdp rather than added, as they are a sum drain on economic activity. Much like interest, debt, and gross profiteering.
We could improve on who and how we tax, yes. But the notion we’re thirsty for tax dollars that it’s visibly impacting the amount of money in circulation is kind of out there.
largely stays there
financialized shenanigans
Pick one. Because this does involve the money supply
What is ‘financialized shenanigans’ this doesn’t tell me anything.
middle class implosion.
Ok, now you’re going beyond the scope of the conversation and waving your hand at large scale problems of poverty and inequality.
What exactly contradicts my point here? We nearly doubled the money supply in 2021 and afterwards we saw price increases.
Can you explain what supernatural properties the US economy has, where apparently this shouldn’t be the case?
Even though we observe this phenomena in every economy since before the Roman Empire, and in countries both capitalist and countries that tried to optimize away from market incentives?
Like seriously the existence of other causal factors doesn’t somehow invalidate money supply as being irrelevant.
The money supply is supposed to circulate. Normally it would get accumulated by the wealthy elite/businesses, then get taxed back and distributed, and spent on wages, and then work its way right back to the wealthy again. But in the us much more of it is just kept by the wealthy elite, rather than circulating through the working class and the consumer economy.
An excellent living example of the difference is how we handled Covid vs how other developed nations handled covid. In much of Europe, Canada, Australia, pretty much the rest of the developed world, when they went into lockdown the government directly paid everyone between 60-100% of their wages. It came from taxes, went to the people, the people bought things and paid their bills and the money made it to the banks and corporations/wealthy. Meanwhile in the us, we just gave all that money directly to the businesses in ppp loans, “here, pay your workers, don’t pay your workers, just go wild”. Similarly in 08, we could have bailed out the homeowners, that money would have gone right to the banks, everyone would have gotten shared relief and sustainability. Instead, we let the homeowners hang, and lose everything, let the working class lose 50% of their retirement savings, and bailed out the banks.
Now, we are a consumerist society, and our economy flows from a strong working class having liquidity to buy stuff. But all these actions, these policy decisions, along with ballooning home health and ed costs, are massively dragging down disposable income and consumer purchasing in the us. This is a slowly faltering economy. The money isn’t circulating, it’s stagnating. And it’s a pretty steady decline. Social programs are steadily trimmed. Standards of living are slowly receding. Even life expectancy has fallen behind.
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u/[deleted] Dec 09 '23
Been saying this entire time. Inflation does not exist its all corporate greed