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re: What actually causes inflation to slow down and stop?
Posted on 10/11/24 at 4:23 pm to SquatchDawg
Posted on 10/11/24 at 4:23 pm to SquatchDawg
quote:
Stop creating money via deficits
Can you explain how this happens in real life?
2
Posted on 10/11/24 at 4:24 pm to baybeefeetz
Tighten money supply
Or, produce more goods and services.
Or, reduce demand
Kicking illegals out, forcing shitheads(most not all ppl )on disability etc to get fricking jobs, and reducing red tape regulations.
Or, produce more goods and services.
Or, reduce demand
Kicking illegals out, forcing shitheads(most not all ppl )on disability etc to get fricking jobs, and reducing red tape regulations.
Posted on 10/11/24 at 4:24 pm to baybeefeetz
quote:
What actually causes inflation to slow down and stop?
Inflation doesn’t stop, it just needs to happen at a rate below the rate of wage growth in the economy. That’s how economies work. If it ever stopped, that would be bad, and would more than likely lead to a recession.
This post was edited on 10/11/24 at 4:29 pm
Posted on 10/11/24 at 4:27 pm to Bonkers119
quote:
If it ever stopped, that would be bad
Bad for debtors.
Excellent for savers.
Posted on 10/11/24 at 4:30 pm to FreddieMac
quote:
but annual deficits
This bullshite. Why Congress doesn't have to balance their budget annually is ridiculous.
Posted on 10/11/24 at 4:46 pm to GumboPot
I don't know about any of this, but I feel like they artificially prevent bust cycles and so we are never going to have a natural fix to the inflationary situation.
Posted on 10/11/24 at 4:49 pm to GumboPot
quote:
Can you explain how this happens in real life?
The term you need to Google is debt monetization.
The Govt spends $2T more than they have so the Fed creates money and buys a portion of those bonds from the Treasury. The rest are sold at market.
When the Fed buys bonds their assets increase. You can see from the Feds balance sheet exactly how much if this is going on.
A good explanation
CATO Institute
Posted on 10/11/24 at 4:51 pm to 91TIGER
quote:
Probably best to disregard anything this retard told you.
Well, he was dead on. Expanding the money supply is what causes inflation. In particular, expanding it faster than productivity is increasing.
Posted on 10/11/24 at 4:52 pm to Bunk Moreland
quote:
I feel like they artificially prevent bust cycles
Before 1913 boom and bust cycles were quick and shallow. Malinvestment was jettisoned from the economy very quickly.
Now, boom and bust cycles are deep, wide and high. For example the Federal Reserve is still winding down mortgage back securities it purchased during the 2008 Financial Crisis as they continue to loan money primarily to the federal government with Ponzi scheme money.
Posted on 10/11/24 at 4:52 pm to baybeefeetz
they'll cut prices once the rabid consumer behavior slows or the supply catches up.
Some will eventually lose business, start laying off people....
Govt spending keeps heating up the economy when it needs to cool.
Some will eventually lose business, start laying off people....
Govt spending keeps heating up the economy when it needs to cool.
This post was edited on 10/11/24 at 4:53 pm
Posted on 10/11/24 at 4:53 pm to SquatchDawg
quote:
The term you need to Google is debt monetization.
The Govt spends $2T more than they have so the Fed creates money and buys a portion of those bonds from the Treasury. The rest are sold at market.
When the Fed buys bonds their assets increase. You can see from the Feds balance sheet exactly how much if this is going on.
I know. I'm just asking the question so that at least some of us are on the same page.
ETA: I'm glad to see you posted the Fed Balance sheet chart. It really tells the story.
This post was edited on 10/11/24 at 4:57 pm
Posted on 10/11/24 at 4:54 pm to baybeefeetz
Stop printing money
Period
Period
Posted on 10/11/24 at 5:29 pm to John Barron
quote:Not so much. Those 15 million subsidized illegals also provide below-market-rate labor, driving down labor costs of blue collar Americans. That's why Paul Ryan's Chamber-of -Commerce GOP supports open borders
Demand increases with money supply expansion.
----
It also increases when you let in 15 million illegal aliens and give them taxpayer money for food and shelter
Posted on 10/11/24 at 5:32 pm to GumboPot
quote:Entities buying US debt. Social Security is a huge aide in this.
Who gave this entity the authority to print money?
Posted on 10/11/24 at 5:42 pm to Bonkers119
Upvote
Posted on 10/11/24 at 5:52 pm to baybeefeetz
production- when companies stop producing or when companies start producing- sounds simple but think of all the things that are tied to that.
A Robust economy -e.g when Trump was Pres.. inflation drops
Economy and production falters - inflation rises
You have to take the restraints off of business and investors to reduce inflation
A Robust economy -e.g when Trump was Pres.. inflation drops
Economy and production falters - inflation rises
You have to take the restraints off of business and investors to reduce inflation
Posted on 10/11/24 at 5:58 pm to baybeefeetz
M2 supply is the biggest cause.
Pressure on the supply or demand side, including commodities.
Pressure on the supply or demand side, including commodities.
Posted on 10/11/24 at 6:06 pm to baybeefeetz
Price = Money Supply X Velocity at which money changes hands
If I give you $10T and you bury it in the backyard, there is no inflation. V=0
If you put $10T into the economy, a lot of hands get hold of it and it moves around a lot. M goes up, V goes up, you get higher prices, or inflation. Even if velocity is the same, if there's more money, prices go up. The equation suggests that if M stays the same and V drops, then prices drop. Hence, if we simply went to cash-only, inflation would go down.
Economists add an index to this equation but I don't think it's very useful.
If I give you $10T and you bury it in the backyard, there is no inflation. V=0
If you put $10T into the economy, a lot of hands get hold of it and it moves around a lot. M goes up, V goes up, you get higher prices, or inflation. Even if velocity is the same, if there's more money, prices go up. The equation suggests that if M stays the same and V drops, then prices drop. Hence, if we simply went to cash-only, inflation would go down.
Economists add an index to this equation but I don't think it's very useful.
This post was edited on 10/11/24 at 6:14 pm
Posted on 10/11/24 at 6:23 pm to Privateer 2007
quote:
Or, produce more goods and services.
Very good point. We need more competition and de-regulation.
Posted on 10/11/24 at 6:26 pm to baybeefeetz
quote:
What actually causes inflation to slow down and stop?
This glorious man knows;
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