Inflation

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Antes de adentrarnos en el estudio de las condiciones económicas actuales nos ocuparemos de un nuevo concepto clave, que es la inflación.

La mayoría de nosotros cree que la inflación se debe al aumento de los precios, pero no es así. Imaginemos que una manzana y una naranja valen 1 dólar este año, pero 10 dólares al siguiente. Dado que su gusto por las manzanas y las naranjas no cambia de un año para otro, lo que de verdad ha cambiado es su dinero, pues ha perdido valor.

La inflación no está causada por el aumento de los precios. El aumento de los precios es más bien un síntoma de la inflación. La inflación está causada por la presencia de demasiado dinero circulante con respecto a los bienes y servicios que de verdad existen en la realidad. Lo que nos suele sorprender es el aumento del precio de las cosas pero, de hecho, la inflación es simplemente la pérdida de valor del dinero debido a su exceso en el mercado.

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Wir müssen uns noch mit einem Schlüsselgedanken befassen, bevor wir in die heutige ökonomische Situation eintauchen. Es geht um Inflation. Die Meisten von uns verbinden Inflation mit der Vorstellung steigender Preise, aber das stimmt nicht ganz.

Stellen Sie sich vor, ein Apfel und eine Orange kosten dieses Jahr je einen Dollar und im folgenden Jahr zehn Dollar. Da Sie in diesem Jahr Äpfel und Orangen genauso gerne essen, wie schon im letzten, ist das einzige was sich verändert hat Ihr Geld.

Es hat an Wert verloren. Inflation wird nicht durch steigende Preise verursacht.

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In this Crash Course video chapter called Fuzzy Numbers, you will learn how our official economic statistics are based on deeply misleading, if not provably false, data. Our economic recession, and possibly depression, can be partially explained by the extent to which we have chosen to provide ourselves with misleading economic data. Certainly if you share my concerns over stocks, bonds, and 401K holdings, or are a serious investor of any sort, you owe it to yourself to listen to this explanation of how wrong our measures of inflation and GDP really are.

In Fuzzy Numbers, we will examine the ways that our measures of inflation and Gross Domestic Product, or GDP, are flawed, using charts of inflation and GDP as well as other easy-to-understand graphics. This chapter will help you understand inflation and GDP and how our national obsession with misrepresenting them to ourselves has led us to the edge of a recession and possibly depression.

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Along the continuum of irrational financial behavior, it can be tricky to tell the difference between a bubble, a mania, and mere touch of exuberance. A bubble is reserved for the height of folly, and history is rich with folly.

So how would we know that we’re in an ‘asset bubble’? What do they look like and what can we expect when one bursts? The Fed famously likes to claim that you can’t spot one until it bursts. But actually you can, and the definition is pretty simple.

Bubbles used to happen once every generation or so, because it took time to forget the pain from the damage. Today we are facing the bursting of a second major asset bubble, housing, spaced less than ten years from the bursting of the dot-com bubble. This is simply astounding and thoroughly unprecedented. It is the largest bubble in all of history and will probably be the most destructive. And it is happening right now.

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Most of us think of inflation as rising prices, but that’s not quite right. Inflation is not caused by rising prices. Rising prices are a symptom of inflation. Inflation is caused by the presence of too much money in relation to goods and services. What we experience is things going up in price, but in fact, inflation is really the value of your money going down, simply because there’s too much of it around. Inflation is, everywhere and always, a monetary phenomenon.

From 1665 to 1776 there was absolutely no inflation. For 111 years, a dollar saved was, well, a dollar saved. Can you imagine what it would be like to live in a world where you could earn a thousand dollars, put it in a coffee can in the backyard, and your great- great grandchildren could dig it up and enjoy the same benefits from that thousand dollars as you would have 111 years previously? This was reality in the US at one time.

What does it mean to live in a world where your money loses value exponentially?