Can someone who's economically literate redpill me on inflation? I understand that it's a basic economic principle that we should always have steady inflation (1-2%) to ensure a stable economy, but is this really the only option? Have currencies always been in a state of constant inflation, since the inception of money?
Something about it reeks of (((usury))) to me, but I'm fairly new to economics and willing to be proved wrong.
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>to ensure stability
Yeah eh. Every Dollar is debt. But. Inflation is good because more stability. Fuck me
Good goyim, don't save you money! It only loses value in the bank! Buy buy buy! Consume! (((invest))).
Google : Tendency of the rate of profit to fall
and you will understand why the financial world need wars.
High inflation means low unemployment. No inflation means high unemployment.
Its a trade off, which is why we have a 1-2% target inflation.
...
>Have currencies always been in a state of constant inflation, since the inception of money?
No. When you have commodity money inflation/deflation is much less predictable.
Inflation is good in that it forces people to use their money to invest/consume instead of hoarding money.
The root of the problem is not inflation itself but the fact that the banks profit from it as they are the ones creating the majority of the money supply, instead of the society as a whole.
It literally makes your dollar worth 1-2% less every year, basically forcing you to use it now instead of saving it.
You do not need inflation, when people lose 10 cents of something deflation does occur but it can be fixed by inflation by 1% every 5 years or something.
Inflation = increase in price level
If inflation is too high >>> inflationary spiral : people consume now instead of saving for fear the currency will devalue more > demand rises > prices increase (i.e. more inflation) > people consume more etc.
If you have deflation / negative inflation, you get a deflationary spiral >>> people delay consumption hoping money will appreciate in real terms > demand drops > prices decrease > people delay consumption etc etc.
All in all, 1-2% is considered the most stable inflation rate (based on observed consumers' utility functions).
It's all just made a up control system by (((them)))
Inflation actually refers to an increase of the currency supply, rising prices are just the result of that. Inflation is much less when a unit of currency is defined to be equivalent to a unit of stuff, like gold.
Inflation is used to control spending by the populace...low inflation means high interest rates, while high inflation means low interest rates...
Inflation makes you spend money. Your dollar today is worth less tomorrow. It's not a secret or a bad thing. Economies are based around buying. Sort of like how taxes make up for government being incapable of making money. It isn’t a hidden agenda, it's a basic function. You don't buy a car with no tires and expect it to work. You don't have an economy with no inflation and expect it to work either.
It's so that if you don't keep money in a jew bank it loses value
Isn't "employment" just a meme? There are other ways to be useful in a free market.
>muh education is the great equalizer
>muh get a good job
~ 2% inflation is a metric of healthy economy
1. In a healthy economy wealth is growing meaning that salaries/return on investments/profits are going up.
2. The cost of good of services will go up naturally as long as consumers can afford them because of 1. A small steady increase meaning consumer wealth growth is keeping up with cost of good and services.
no inflation or deflation means there is no growth or negative growth and producers of good and services cannot raise the price of the products or have to decrease it.
Very high inflation is usually a sign that money in said economy is losing value for whatever reason
The reason inflation is good is because it makes you need to use your money or lose it. It forces investment and growth.
Also, if you try to get very very little inflation, theres a chance you enter deflation. When deflation happens, it means not using your money is best. So no one spends money, which shinks the economy, which causes even more deflation until the economy is completely fucked like the great depression.
So mild inflation is also good at preventing any slips into deflation which is 1000X worse.
Supply and demand.
If you increase the supply of money in circulation, you decrease the demand for that money.
Spoken like a true econ major
Of course, goy, you can't be allowed to hoard your shekels for a rainy day. Inflations helps by forcing you spend or invest your savings on (((the markets))) and keep you living paycheck to paycheck as your wealth is locked up somewhere you can't access.
youtube.com
The whole Banking industry was a Jewish scam from its inception.
The fact that inflation is fucking BULLSHIT is probably the biggest redpill.
It shouldn't exist and it doesn't help the economy.
The industrial revolution happened under DEFLATION with prices decreasing all the time instead of going up. Living standards dramatically rose during this period.
>No inflation means high unemployment.
This is false.
The gilded age had extremely low unemployment.
You only get temporary unemployment by transitioning from a inflationary economy to a deflationary one.
Well to an extent sure. Millenials are idiots and think they need a Bachelors in sociology or communications to get a good job. When in reality the most in demand jobs are med-high skill jobs that require little education.
But thats a different topic, inflation and unemployment are measurable on the biggest scales and can be controlled as such. You cant run around to every idiot millennial and tell them they will make more money as a metal worker and they need to do that.
Daily reminder the first country to eliminate their central bank and allow free market banking will have the highest living standards on earth within 5 years.
Massive high paying service sector jobs with dominate this country's economy to consume the goods the rest of the world has to produce for it.
The workweek would shrink to 2-3 days a week and people would retire much earlier. This will also lead to more jobs becoming available.
Everyone would have high saving rates. Houses would be inexpensive. Debt would be strongly discouraged economically.
Massive automation would take place as the cost of capital goods would be extremely cheap. This will lead to massive levels of technological innovation.
It would be extremely easy for the average person to start a business due to the cheap cost of capital goods.
Daily reminder REAL capitalism has prices falling all the time instead is going up.
Daily reminder America never had a system of free market banking. There were only patches of American history with free market banking. The panics that happened during the 1800s were due to government intervention in the banking sector. Sweden had the longest most successful period of free banking and that's what made them really rich.
Daily reminder the longest period of (relatively)free banking in America coincided with the INDUSTRIAL REVOLUTION where wages rose and prices fell.
Daily reminder central banks are the very reason the economy is a pile of shit and our generation is so fucked.
I remember that video, it educated me on who the Merchants Prophesied in the bible really were. And as it was in the time of Our Lord Jesus, so it is in the last days of this system. The very same merchants who controlled the conversion in the temple, the very same ones who changed the House of God into a den of robbers and thieves, are now the very same bankers who control conversions and fiat monopolies the world over. It's like the temple, but now it's everywhere.
>Have currencies always been in a state of constant inflation, since the inception of money?
NO
The natural tenancy for ANY currency is for prices to come DOWN. I can't believe people are this fucking brainwashed.
Any currency not controlled by the government will have price decreases, unless something crazy like a war or natural disaster happens wiping out supply.
Actually that is kind of true,it's better to invest it,in the bank it barely keeps pace with inflation so you either invest it in thing that increase value or get off the ride and put it into shinny pet rocks like myself
The fed and central banks are one of the biggest red pills there are,if you understand how they fuck you with debt slavery,they do the exact same germany does to Greece or other countries do to shitty africa countries,they lend you money,knowing you can't and don't expect to pay it back because another goverment will be on charge by the time it is due,and so the next ruler is forced to ask for another loan only to pay the interests and thus they start with (((conditions)))
Pic related
your confusing gains in productivity lowering the cost of goods with deflation
>Also, if you try to get very very little inflation, theres a chance you enter deflation. When deflation happens, it means not using your money is best. So no one spends money, which shinks the economy, which causes even more deflation until the economy is completely fucked like the great depression.
The jews actually brainwashed you people to believe this shit. Honestly holy fuck are you ever stupid.
this dood right
Gains in productivity caused the lowering of the price of goods.
>all these things that are very weakly correlated equals causation because I said so
Seriously, this might win most uneducated comment of the day. Not even the most radical of classical economists would agree with you.
>weakly correlated
They're strongly correlated, what are you talking about?
>Not even the most radical of classical economists would agree with you.
Because they're legit retarded?
Inflation is necessary evil to account for things like people destroying or losing money.
That $5 from 50 years ago that got lost in the mud was quite a lot. Nowadays, not so much. It's also a way for government to nigger money.
The US has a huge debt, which is an enormous understatement. Our debt is larger than any momentary sum ever held or owed by an insane margin.
To deal with this debt, the US will either default or print shitloads of money, causing tons of inflation.
The smart move is to assume massive inflation in the coming years and to plan accordingly by placing your wealth into objects that scale with inflation.
I've done a lot of research on what to invest in, and every fucking time I come back to real estate.
Another option you see advertised a lot is gold/silver, but I've shied away from them because they don't make money in the meantime and you only win if the economy fails.
TL;DR - Record USA debt will likely cause lots of inflation in the future; liquid assets will be devalued. Place your money in investments that will not be fucked by inflation.
>muh phillips curve
that only worked in the 60s before the markets started catching on to what the Fed does and adjusting in advance for it. Phillips curve no longer applies because the tendency of people to immediately adjust for inflation dampens any stimulatory effect it might have had.
this.
Inflation (the lowering of a value of a currency) itself isn't necessary, it's just that as the actual amount of value increases in an economy (e.g. more goods and services produced), the demand for currency increases and it helps to keep prices stable by increasing the supply of currency proportionally. Also, as the post I responded "this" to indicates, it's better to err on the sode of inflation than deflation.
inflation is conflated falsely with money supplies
what is needed is an increasing supply of money with which to do exchanges with,
this is done in two ways
by increasing the supply of what ever you back your currency with
or by printing/typing unto a computer at the FED without increasing the backing which is grossly unlawful in the US
>Inflation is necessary evil to account for things like people destroying or losing money.
boy you're a dumb fuck.
If money is destroyed it makes the value of all other money more valuable, increasing our living standards.
t. retard
there are some issues but deflation is far worse than inflation
>argue against keynesian economics
>argue for less govt intervention in economies
>the definition of classical economists
>"classical economists are legit retarded"
No understanding of economics, let alone what your own argument is
> T. tin foil hat retard
All the FED does is try balance out the economic cycle of boom and bust. They ease intrest rates to stimulate the economy during the bust and raise intrest rates to slow the economy during the boom. The theory is this causes less wild swings in the cycle.
Everything you wrote is straight retarded
Inflation doesn't increase living standards.
It destroys savings and keeps people reliant on debt.
You people are communists.
Ok goldfags... serious question.
What's your plan for getting out of a recession if you can't control the aggregated demand with monetary instruments?
The flag should be a dead give away.
Never give a leaf the benefit of the doubt.
>the gilded age was terrible
AAHAHHAHAHAHAHAHAHAHA
classical economists are just as delusional
Fuck you
>All the FED does is try balance out the economic cycle of boom and bust.
Then why do they do a terrible fucking job all the time?
Why are they destroying our living standards?
If you support the (((Federal Reserve))) why are you on Sup Forums?
>basic monetary economics is le j00z!
no, it doesn't , but it's preferable to deflation
IM A CAPITALISSSST AND I. DESERVE. THE RESPECT
ACCORDED THAT TITLE.
It just disappointments me that its not b8 and that people are actually that delusional.
You mean back when most people were farmers and those who worked in industry prior to minimum wage, safety regulations, mandatory breaks, and limited working hours? A lot of famers were in crushing debt and couldn't earn enough money no matter how much they worked and industrial workers didn't make much money for all the work they did 12 hours a day every day in hazardous conditions. It really isn't comparable to today.
Well im glad you read it so you actually know how it works now. But im saddend that you are to retarded to understand it.
>If money is destroyed
If it's destroyed by the government, dumb fucking leaf. Were you ever taught to read and understand what's written?
Fuck you kike
Canada was a mistake.
But if ((he)) can create his own money then what is the point in wanting more from others? He already has everything he needs in life. I'll never understand the banks.
Steady inflation is pretty much inherent to all decent economies. Deflation is even worse.
>Why are they destroying our living standards?
How?
and dont just write out comes like "they make houses unaffordable" write how they actually make that happen.
we are currently on a 8+ year run of low stable inflation and decreasing unemployment and increasing asset prices.
what do you expect or what is the counterfactual here?
His rhetoric reminds me of commie rhetoric. His flag reaffirms this connection.
A dollar is a dollar, but today's dollar can have a different value than yesterday's dollar. This is a good thing and makes perfect sense. It's like having an economy based on exchanging quantities of heat, but there is no standard for what a degree is. It's always changing, and that way things don't become static and boring. If this strikes you as a fundamentally dishonest and sketchy way of doing things, there's something wrong with you. This kind of flexibility is critical to a smooth running financial system. It would never, ever be used to stealthily defraud anyone.
if you really HATE inflation so much, you should appreciate the Federal Reserve. If the currency were actually under the control of Congress (as specified by the constitution), inflation would probably be far higher. pic related
>inflation of your currency is a good thing
>then what is the point in wanting more from others?
Power and influence.
>keep printing, nothing can go wrong!
>WE'RE THE LESSER OF TWO EVILS GOYIM
Why just not have the evils in the first place?
We need free market banking.
>b-b-buh muh panics(which were government caused in the first place)
Inflation is meant to prevent rich people form sitting on their cash. It sill slowly loose its value if they do nothing with it... That said, it is an obsolete idea now that banks just lend out/invest your savings anyways.
>1 loaf of bread?
>thatll be 40 trillion dollars thank you
t. gommie :D
>always have steady inflation
tha'ts mainstream (((economics))) meme
No steady inflation does not ensure a stable economy. For a government created currency the ideal scenario would be 0% inflation where the supply of money is always perfectly balanced immediately.
It's not a difficult concept.
The purpose of money is, quite literally, to be exchanged. If you are able to gain or maintain profit by simply saving it (aka no risk) then it is not fulfilling it's intended purpose.
Long story short, inflation prevents situations where either might happen
>1-2% per year
>the same thing as 79,600,000,000% per month
>free market
.....
Central banks these days have inflation targets of around 2%. This is because deflation (as in, negative inflation) makes warranties lose value in relation to debt, which discourages lending and investment and therefore hampers economic growth.
It hasn't always been so. In the 19th century inflation was unheard of, but it eventually came to be when WWI forced most countries to print money in order to fund the war effort. Everyone except the US went broke, which essentially annihilated the gold standard that had kept the system stable. Moreover, when keynesian principles became the new standards, governments started prioritizing full employment and according to Phillips curve you have to choose between low inflation and low unemployment. So basically after WWII double digit inflation wasn't unheard of. This continued until the 70's oil shock, where increase of money supply didn't lead to decreased unemployment, which couldn't be explained by the keynesian models back then. So this essentially lead to adopting the monetarist policy of having small inflation targets, which is basically what central banks do now.
I would be fine with a free market banking system and a gold backed currency desu
>decreasing unemployment
this is what obamatards actually believe. They deceitfully use stats that make them look better.
unemployment rate = fake unemployment rate
labor-force participation rate = real employment
Inflation is a great idea only if the government controls it. Today inflation is controlled by central banks, most of whom have no obligation to protect citizens.
Inflation is when money is worth less than the next year. This occurs to ensure a steady flow of economy. No hoarding currency.
Inflation is needed to prevent natural deflation. Deflation is when the dollar becomes worth more than previous years. This sounds good but if it occurs naturally a lot of people would be in economic turmoil.
A good economic plan is to have a constant cycle of inflation and deflation.
>I understand that it's a basic economic principle that we should always have steady inflation (1-2%) to ensure a stable economy
No.
Note that the second graph is much more volatile in its states of inflation and deflation but that they counteract each other to form an equilibrium.
The actual rich people have most of the wealth in assets that grow in value faster than inflation.
Japan has had deflation since early 1990's if I recall correctly and they aren't exactly booming. And there are special cases where monetary devaluation is a good idea, since nominal wages aren't downwards flexible while real wages are.
The gold standard used to work when everyone had a laissez-faire policies and little government intervention. It wouldn't work in present day Europe, let alone the whole world.
This,
If you can't find a good investment and just want off the hora (the Jewish riding chair things they do)ride then you can buy shinny pet rocks like I do.
Also you could read only half the comments the other had are retarded,jews shilling or woman.
Putting fiat currency in banks with the inflation we are experiencing it's a really bold investment into the paper industry
Which is why government needs to fuck off out of 90% of what it's sticking its grubby kike hands into.
That'll never happen of course because everyone loves big daddy taking care of them and saying everything will be okay as the blade sinks deeper.
How is 1-2% inflation more stable than 1-2% deflation?
since '08 labour force participation has gone from 66->63 according to to your graph.
in this time unemployment has gone from 10->4.5
guess what? thats a net gain for 2.5% more people working still.
You earn a dollar from me. It's worth a dollar.
I now say your dollar is only worth .98 dollars
>inflation
you can always find the retard in these threads who doesnt know to graph growth rates as log variables.
you can also always find people like you who can't do basic arithmetic.
Because it's practically impossible to maintain a constant currency value, it's far better to err on the side of inflation.
When deflation happens, people stop investing and begin to hoard their money, tanking every market.
See Japan.
We did just fine before the federal reserve was founded and we abandoned the gold standard
This is the question Keynesians can't seem to answer.
>See Japan.
You faggots are wrong about Japan.
This is the answer, thread can end now.
?
Keynesianism provides the most definitive answer to that question that any other economic framework.
low stable inflation induces people to spend which keeps aggregate demand steady. deflation doesn't do that.
The gold standard can't work in today's world due to population and the finite amount of gold. There just simply wouldn't be enough money in circulation to accommodate the whole populace. If you keep printing more money tied to gold, we'll just have hyperinflation which is bad and what happened to Weimar Germany.
That was way before investment and banking became a thing.
>inb4 Jewish schemes
Solid economic systems including banking and investment are the reasons your ordinary Joe can get a mortgage and live in an actual house. It's the reason you can buy things with credit, and this system relies on stability and constant reinvestment of capital.
>lulbertarian website
kek
>wtf I love deflation now
Then people use smaller denominations of gold.
This isn't that complicated, you guys are economically clueless.
Inflation has nothing to do with usury (interests).
Inflation is the increase of the money supply. Simply put, you have 10'000$ in circulation and a candy is worth 1$. The next year you have 12'000$ in circulation, the same candy will be worth 1.20$.
>How do you increase the money supply ?
When you ask for a loan, the bank will create (yes you read that right) the amount of your loan and put it into your account. The amount of money a bank can create (loan) is limited, it's called reserve ratio. It's defined by central banks. Let's say the reserve ratio is 10% (it's more like 20/30 actually but let's keep it simple), then if a bank has 100'000$ in reserve they can loan (create) 10'000.
>What are interest
Now here's the fun part. Let's take the same bank that can loan 10'000$. You have 5 people each asking for a 2'000$ loan. The bank will charge interest, let's say 1%. Each person will then be in debt of 2'000 + 100. The bank created 10'000, but is owned 10'500. That mean one thing, at least one person out of five will be screwed and won't be able to repay the loan.
The banking system is simply the law of nature applied to economy, only the strongest (economically) will survive.
Watch this
youtu.be