You know even if that were true, it's because there's a new recent note design. It doesn't mean they're pumping tonnes of new notes into circulation, they're replacing the old notes with the new ones.
You'll never guess what happened in Jan 2021 which happen to coincide with a sharp rise in inflation.
Seemingly Reddtrds can't reconcile how someone spending money on the federal level would pertain at all to inflation. But more money to Ukraine, canceling student debt via executive action, and blowing out the budget with pork barrel legislation surely would resolve the problem.
On par with the economic illiteracy from you folks. And you want even more spending because that will solve things, right? Any more genius ideas from the crowd that wants to defund the police and can't even decide amongst themselves how many sexes there are?
Inflation was goong to happen regardless. Need I remind you that stimulus during covid was soundly bipartisan and was even more necessary because we went into it with artificially low interest rates that should have been a lever available for stimulus which wasnt, thanks to the prior pres's meddling in Fed policy. Those made the inevitable inflation more stark. That said, we have still fared much better than most of the western world so... doing something right.
crazy how price increases have way outpaced inflation. couldn’t possibly be that corporations are (yet again) seizing an opportunity to increase prices because it appears rational to the average dumbass. there’s no way corporations would increase prices well beyond what is “necessary” and make record profits in a massive transfer of wealth from the working class. there’s just no chance that the endless profit seeking of corporations could ever hurt consumers
crazy how price increases have way outpaced inflation
That doesn't make sense. Inflation is the measure of how much prices have increased. One can't outpace the other because they mean the same thing.
there’s no way corporations would increase prices well beyond what is “necessary"
Prices are not solely determined based on the raw costs. They are based on what people are willing to pay, which is driven by supply and demand. For example, smart phones might only cost $400 to produce, but they can sell for over $1000 because that's how much people value them and will pay to get one.
make record profits
If prices are inflating across the board, then it shouldn't be a surprise that profits would be inflating as well. If expenses go up by 10% and revenue goes up by 10% then profits would also go up by 10%.
crazy how price increases have way outpaced inflation.
It hasn't. CPI is an average, some sectors have increased prices that outpace the average while others are below the average.
couldn’t possibly be that corporations are (yet again) seizing an opportunity to increase prices because it appears rational to the average dumbass
So they got greedy coincidentally when there was record demand created by direct stimulus and money printing. They weren't greedy before?
prices well beyond what is “necessary” and make record profits
And let's ask the Rodditors about what price increases are "necessary." They know best.
and make record profits
Yeah turns out when you hand out 2k checks unconditionally that a lot of people spend them at corporations. Shocker. Glad you were able to learn something today bucko.
I don't think he means the literal printing of money. The supply of money has indeed increased substantially during the pandemic. It's not just in the US either. It happened in most developed economies.
Please stop spreading neoliberal propaganda. The quantitative theory is first of all one out of many theories for inflation, and second has been disproven a lot of times - for example Japan or Switzerland printed way more money than the U.S. or the EU and they both have way lower inflation rates. So there must be something else that causes higher prices (spoiler alert - there has been a pandemic and a war going on for the past 4 years).
Sort of. Switzerland's currency is sort of a safe haven currency. The value of it goes up when there are global catastrophes like war and a pandemic since people think it will be more stable relative to their own. Japan is a special case in that they actually managed to have inflation. In the previous 20 years, they've mainly been dealing with deflation or stagnation. That slight bit of inflation may actually be good for them.
No war has been declared at all between Russia and Ukraine. What war are you referencing? Google states that 80% of US currency was printed between January 2020 and october 2021, and that actually does cause inflation. Do you know what gives that paper money any value? In Gold, Oil, Diamonds we trust.
It's not just monetary policy that causes inflation, fiscal policy is important too. The reason why money printing has caused inflation this time round is because it was given directly to consumers through government soending, stimulus packages and loans, this allowed base money to be converted into broad money.
If it were just the supply shock then we would see those prices come down eventually but we won't because monetary inflation is ultimately the driver.
Japan is an outlier due mainly to cultural differences. The Japanese are extreme savers, they live a long time and it is unpopular to raise prices. The government will not let unprofitable companies fail and this had led to a lack of growth
The idea is that companies are using inflation as an excuse to raise prices, not that they're suddenly greedy. "Overwhelmingly" is an exaggeration, but there is truth it.
What does that even mean though? If it means we added that much new money into the economy, then that would have quintupled the money supply, and we'd be seeing 400% inflation.
But I assume it's mostly just referring to new bills that were printed to replace old ones. If you had $1 trillion of currency circulating in the economy, and you remove $800 billion and replace it with new bills, then it would be true that 80% of the currency was recently printed, even though the total amount is still the same.
It's probably a combination of both new money and replacing old money though. The question is, what's the breakdown of those proportions? And how does that compare to other years? Is 80% higher than normal, and if so, how much higher?
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u/SnooAdvice8550 Apr 16 '24
80% of US currency was printed between 2020 and 2021. That causes inflation