What's the solution to inflation? How do we prevent it?

What's the solution to inflation? How do we prevent it?

why is it called inflation when it becomes less

why isn't it called deflation

go back to the part where you explain why our goal is preventing it

inflation is a good thing. you just need wages to keep up or exceed inflation, which we have not done since 1972.

Stop it?

because nominal interest rates and the quantity of money increase

because it's referring to the amount of currency you need to have to get a relative amount of purchasing power, not the purchasing power of the money itself,

Kek, because its an invisible tax, the government is destroying our wealth

lrn to economics

Name 1 (one) way it is good

Because you need more money.
Don't think of a shrinking dollar. Think of a growing money bag.

Numbers get inflated, but those big numbers have the same value. Like in World of Warcraft where you get more numbers every time you level up, but you still need to hit an enemy the same amount of times to kill them.

Definitely raise the minimum wage and borrow more of your children's future tax dollars from the Federal Reserve. You can trust the kikes.

Print more money

It's called inflation because the supply of money is inflated, thus reducing the value of that money.

New money enters circulation through the banks, which they make money off of, then as prices go up wages lag behind resulting in decreased purchasing power for most of the population. Meanwhile the firms that are able to use newly created money earlier benefit more form it since the effects of inflation haven't set in yet.

Low but positive inflation allows economic cycles to be smoother. That's a good thing.

>setting one of the highest peaks of real minimum wage as the target that needs to be met
no thanks

we can inflate away national debt because no one will notice and price in their real losses xD

yep

gold

standard

It's not good or bad. It's just neutral. It really doesn't make a difference if $20 buys you a bag of chips or a car. It's all about how much money you make in the first place.

>what looks like a bag of flour and frozen vegetables or $20
Come on, I can get that for $5 maximum.

just print more money goyim!!!

>Name 1 (one) way it is good

It encourages the spending of currency rather than the hoarding of currency. Which is why deflation is bad for an economy-

Literally stop printing money

No more inflation

Actually the government is destroying its debt. Thanks to inflation anyone who buys a 30 year treasury bond is paying the US government for the privilege of paying the US government.

Inflation is also good for a capitalist economy. It forces people to spend now rather then save. Saving is bad for capitalism. It means nobody is spending.

So people's life savings don't degrade in value, and prices don't go up faster than wages do. So people can have fun with their money and live like human beings, instead of cattle who exist for the sole purpose of increasing the GDP by working harder and harder for less and less.

a small amount of inflation forces people to spend and invest instead of hoarding which keeps the economy moving

>$35

pretty good to be quite honest family

Have you ever heard her voice? It is fucking hilarious.

they don't actually print money, retard

look up "3 tools of monetary control" and "money multiplier"

people who don't know Macro shouldn't be allowed to post in these threads

Recognize that no fiat currencies are actually stores of values. So keep minimal wealth in cash, have only liquid investments for that purpose.

I.e. don't open a savings account with huge amounts of cash in it.

>20 dollars buying that much in 1992
>20 dollars buying that little in 2012

But inflation devalues savings.

see

if the devaluing of a currency is, in part, related to the amount of it in circulation, why not take money out of circulation thus increasing the value of the remaining currency?

Probably the only solution. I was always curious about what would happen if the government actually let the dollar deflate naturally though, which I assume it would if the crony capitalism stopped.

Yeah but that's not a long term solution. We need to expand the money supply as the productive economy grows, or else we'll end up with deflation which is worse. But how do you tie the money supply to productive growth?

It not neutral tard

The government borrows money and then cheapens the currency so its easier for them to get into debt

Would you be opposed to me creating inflation by counter-fitting the currency? Why?

Its great for politicians. They can promise their voters something like social security, but can then pay out in inflated dollars.

muh saving up resources is bad maymay

muh spending creates wealth maymay

ftfy

When people say "print more money" they don't mean the literal printing of money on presses, they're referring to increase of the money supply.

>but can then pay out in inflated dollars.

that's not how it works. social security payouts are determined by the consumer price index, aka they are adjusted yearly to account for inflation of goods.

1972 was a long time ago

inflation isn't a big deal, its the govts spending policies

By increasing the value of labor:

End illegal immigration
Limit outsourcing

Make America great again

SAVING IS THE FIRST STEP OF BUILDING CAPITAL YOU IGNORANT RETARD

It's fundamental to capitalism, anyone who doesn't understand this knows nothing

When the government wants to "stimulate" the economy and encourage spending, society will get poorer than otherwise

>Saving is bad for capitalism. It means nobody is spending.

oh that meme.

Somebody's savings is somebody else's investment in our fractional reserve system

You don't need inflation on top of that.

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Print more money
XDDDD

spend spend spend, spend our way to wealth

I learned it from Hillary mah

>But inflation devalues savings.
Did I imply otherwise?

...

because its bad for merchants

Austrian meme does not get the difference between financial saving and national accounting saving.

Damn, you beat me to it.

>SAVING IS THE FIRST STEP OF BUILDING CAPITAL YOU IGNORANT RETARD
>It's fundamental to capitalism, anyone who doesn't understand this knows nothing

New Capital projects are hardly ever funded with savings, they are funded with Debt.

If you want to go buy a business for investment purposes you don't take the 1 million dollars you have in a money market fund and buy the pizza hut, you go to a bank and get a small business loan backed with your collateral.

Do you think someone builds a skyscaper with money saved up in a bank? It is from commercial lending.

So as long as inflation is kept reasonably low money is "cheap" and it pushes up investment and spending.

>Saving is bad for capitalism. It means nobody is spending.
People save for a reason and eventually spend it. Very few people die with lots of money in the bank and no heirs waiting to collect.
Why don't we just get rid of pensions while we're at it, since that money isn't being "spent" either.

>being this good of a goyim

see

and the rate of increase is less than the rate of inflation.

Same thing is happening with virtually all pension funds right now.

Re SS. we are moving toward 2 workers for retiree vs old 7 employees per retiree. It's fucked. But you still have to pay into it.

Gold standard, ban usury.

No its not. This is a neo capitalist economy. No wage slave can hope to save enough to enter the market. Be thankful you can save enough over your life to pah y the rent and buy food for the last 15 years of your existence.

In the meantime you might as well enjoy all the diversions and distractions on offer and feel safe in knowing a matbematical algorithm has already predicted your worth to societh within a statistical margin of error of 3 to 4 percent. All hail the market our god.

Print less money

Why didn't you put a malt liquor in the basket on 2016? Why do you have no respect for black culture?

>Most Americans are stupid
>Most of them vote like idiots
>Most of them will buy a $8 Big Mac meal with a Coke even if there's a better place nearby
>Most of them are too stupid to realize that McDonald's really isn't cheap or convenient
>Most of them do the same at the grocery store
>Hurpaderp why does $20 get me less?

Oh, and we also live in the nation where "organic" or "natural" or "buying local" is a meme that advertisers take advantage of. That's why, where beaner countries can get cheap rice and fruits and veggies, we spend up the ass for some of them. Some of them literally are worth the price! Don't forget that, but there are plenty of things we buy that are just overpriced.

I care about our fellow citizens, that's why I'm saying that a lot of them are misled to make shitty choices in food. We need to fix that. Educate them. Do something. I can't fucking sit back when my mother goes off to buy a Big Mac.

I missed, somehow.

was meant for

why was the gold standard taken down?

>literally describing the banks that were bankrupt 8 years ago as a """"""""""good"""""""""" system

No, you obviously ask your father for a small loan of a million dollars.

In all seriousness, you are correct but you are not explaining things properly. But whatever, they will not learn anyway.

And the future

Community money.
Local economies, the reality of managing which will necessitate the use of blockchain technology.
Still 30-40 years away from any serious implementation of it.

Lol you think pensions are still a thing. How cute.

Inflation is fine IF people make higher wages to compensate for it.

Unfortunately in America's jew-ridden economy people still get paid piss poor wages even in fields like finance

Exactly, lets always be out of resources at all times so if an earthquake hits we have nothing ready

Perfect liberal logic, think they are in control

emphasis on if, companies bitch just with the $15 minimum wage.

- Seasonal spikes in interest rates that arbitrarily constrain the economy;
- No flexibility to smooth business cycles under a severe recession (what's happening in the EU, atm).

Because government had to account for their budget

>New Capital projects are hardly ever funded with savings, they are funded with Debt.

Fucking christ your circular reasoning.

Yeah a government can issue bonds to fund a capital investment. But those bonds are purchased though somebody else's savings as an investment. Yeah lots of pension funds are holding municipal bonds, but once again that is savings used to purchase the bonds to fund the investment.

Your skyscraper could be partially funded though a REIT (realesate investment trust), again it is savings that purchase shares in the REIT that is an investment toward future returns.

None of these things require inflation or new money.

What you are advocating for is a true no-no. The government prints money to fund a budget deficit part of which funds a construction project.

>Re SS. we are moving toward 2 workers for retiree vs old 7 employees per retiree. It's fucked. But you still have to pay into it.

Social Security isn't fucked. It isn't a lockbox like Al Gore describes. If you take in less than you pay out, you just have to cover it with resources from your general fund.

The largest expenditure, by far is military. If we reduced that by 33% we could fund social security at a much higher level.

>and the rate of increase is less than the rate of inflation

That's because the C.P.I. is a basket of consumer goods (aka what an old person would spend their money on who is using SS to subsist on) rather than the inflation rate for the whole economy.

Basing it on CPI will actually give oldsters more money this year because if it was just inflation as a whole they would get less of an increase since CPI doesnt include the price of gasoline, which dropped over the last year.

Not liberal logic. Fact of life. We live in a neo capitalist economy. You are not allowed to save.

Inflation is a natural byproduct of a healthy economy

Gold and or silver backed currency.

well that's why it's in all-caps, senpai

You produce exactly as much currency as the economy currently needs to cover growth of goods and services or base your currency on a resource that is finite.

So, solving it either takes an impossible amount of speculation, or can have results that are worse that inflation.

>Being proud of risking your life for a wage that is unlivable

Fucking boomers I swear to christ

"General fund"

>debtclock.org

the banks that went under were selling consumer debt rather than commercial debt.

There was no commercial lender who went under. Because commercial loans are scrutinized at a higher rate than loans for mortgage.

Rising wages

>infinite growth
>healthy

Start using Coupons

spending is literally how you make money, senpai

when you put less restrictions on the money supply, people and institutions (namely banks) can spend and invest more.

yeah you get inflation, but that's just a byproduct of an expanding economy.

>you are correct but you are not explaining things properly.

I am explaining the cheap dollar policy, which is the official policy of the federal reserve to keep US GDP propped up.

Is stupid. Just as stupid as backing the economy with cucumbers shaped like penises. Both are commodities subject to scarcity but the penis shaped cucumbers are way more fun.

>Social Security isn't fucked. It isn't a lockbox like Al Gore describes. If you take in less than you pay out, you just have to cover it with resources from your general fund.
>The largest expenditure, by far is military. If we reduced that by 33% we could fund social security at a much higher level.

right now all of our non-discretionary spending (Social security, welfare, etc) is barely covered by tax receipts, and almost all discretionary spending (including the military) is covered by issuing new debt.

There is no 'general fund' available for SS. We only have 19T in debt and rising fast.

Worked fine since about 1750

There are two channels of lending: monetary and non-monetary. You are only talking about the non-monetary one. That's actually the smallest channel.

There is a difference between financial saving and the savings used in national accounting. Economists are always talking about the second one. Savings in national accounts are by definition equal to investment (in a closed economy) but national accounts say nothing about the direction of the relationship. Assuming Savings -> Investment is wrong. Lastly, you do not need financial saving to have investment.

Gold standard or Bitcoin standard.

Bitcoin standard would be better because in the future it might become possible to create more gold through science or find more gold in space. Bitcoin is immune to these things.

Bitcoin backed currency would actually be better than using Bitcoin as a currency.

I don't know where the infinite growth meme comes from. No economist says it is required lol

>he doesn't realize that the national debt includes the national savings (social security).

Hint: your savings account is recorded as a debt on the balance sheet by your bank

you know what...in 1972, $20 didn't even cover that many groceries. so what is gained by exaggerating in the image?

$10 per bag, about $100 a shopping cart full
Of course I was making $3.10 an hour.

1985: $20 a bag of groceries, about $200 for a full cart.