Inflation Nation!

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Thomas Hedin's picture
Thomas Hedin
Status: Platinum Member (Offline)
Joined: Jan 28 2009
Posts: 815
Inflation Nation!

I know we all keep getting told that the cause of price inflation is they just keep printing to much money.

If that is true, then why are we all so short of money?

Would all these businesses be going out of business because they had to much money?

Would people stop making their house payments because they had to much money?

What would we care what our money is worth if we had to much of it?

Morpheus's picture
Morpheus
Status: Diamond Member (Offline)
Joined: Dec 27 2008
Posts: 1200
Re: Inflation Nation!
Thomas Hedin wrote:

I know we all keep getting told that the cause of price inflation is they just keep printing to much money.

If that is true, then why are we all so short of money?

Would all these businesses be going out of business because they had to much money?

Would people stop making their house payments because they had to much money?

What would we care what our money is worth if we had to much of it?

My initial hunch is twofold: First, it's not manifesting itself as wage increases. Second, the money velocity is slow, sitting in institutions that are shoring up their balance sheets. Once that starts moving, and the latency of the Porkulus Law spending  passes, you'll see the difference noticably.

Just my 2/100th's of a Federal Reserve Note.

KKPSTEIN's picture
KKPSTEIN
Status: Silver Member (Offline)
Joined: Oct 20 2008
Posts: 120
Re: Inflation Nation!

I just wanted to add, when we increase the circulation of money but the availability of goods and services remain the same, this causes an increase in prices.

I think the money is there, but it is distributed througout the system in places that don't touch our daily lives, such as the ongoing and costly war in Iraq.  When we have economic downturn, the amount of money and wealth remains the same, the money doesn't disappear, it just changes hands.

 

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