What's causing inflation?

MayCaesar

Inflation is simply reduction of value of currency as a consequence of increase of its supply or reduction of its demand. There is no magic to it: it is as simple as one banknote of a constant value you hold corresponding to smaller asset value tomorrow than it did yesterday. Yesterday one banknote could get you 1 lb of apples, but today the market values it at 0.98 lb.

If the economy has N banknotes, and the total value of assets available on the market is X, then one banknote corresponds to X/N asset value. When the economy contracts, however, due to governmental restrictions such as lockdowns shutting businesses down and slowing down the recovery, then the total value of available assets drops sharply, so now one banknote corresponds to Y/N asset value, where Y < X. Furthermore, with the printing press working hard, the number of banknotes available increases, so now you have M > N banknotes, and in the expression for the value of one banknote, Y/M, the numerator is smaller, and the denominator is bigger than before. So one banknote becomes less valuable, and conversely one requires more banknotes in order to purchase the same asset value.

The only thing to blame here is mathematics. And the government that does not understand said mathematics. And the people who vote for the government that does not understand said mathematics.

just_sayin

Dreamer said:

Many people like to throw around the blame. But what is the cause? I think it is recovery from the pandemic.

https://www.npr.org/sections/money/2022/01/18/1073053108/the-movement-to-stick-inflation-blame-on-biden

Remember the Orange one fired the pandemic monitoring team.

https://www.snopes.com/fact-check/trump-fire-pandemic-team/

Trigger Warning:
The following contains facts which may upset leftists.

Snopes got caught LYING AGAIN last week in its propaganda agenda for Biden when it said he was wearing a hardhat correctly, when he obviously had it on backward.  See

Snopes admits Biden wore construction hard hat backwards in 'fact check' reversal

Let's address the lie that Trump made the US vulnerable with no pandemic team.  I ask you to look at Reuters

Partly false claim: Trump fired entire pandemic response team in 2018

Now Trump did fire the head of the pandemic team, when he combined that team with 2 other directorates due to overlap and the similar nature of work being done.  To make some claim that the US did not respond to the pandemic or that the members of that team were not working on the issue is a lie.  I hope you will repent of that implied falsehood. 

Three days later, Tim Morrison, former senior director for counterproliferation and biodefense on the NSC, wrote in another Washington Post Op-Ed, “It is true that the Trump administration has seen fit to shrink the NSC staff. But the bloat that occurred under the previous administration clearly needed a correction. … One such move at the NSC was to create the counterproliferation and biodefense directorate, which was the result of consolidating three directorates into one, given the obvious overlap between arms control and nonproliferation, weapons of mass destruction terrorism, and global health and biodefense. It is this reorganization that critics have misconstrued or intentionally misrepresented. If anything, the combined directorate was stronger because related expertise could be commingled” ( here ).

On March 14, 2020, John Bolton described the changes made to the team as streamlining. He tweeted: “Claims that streamlining NSC structures impaired our nation's bio defense are false. Global health remained a top NSC priority, and its expert team was critical to effectively handling the 2018-19 Africa Ebola crisis. The angry Left just can't stop attacking, even in a crisis.” ( here )

I hope you will acknowledge that Snopes 'fact check' omitted Significant details.  Regarding inflation,  within 4 months of passing Biden's so-called inflation reduction act, the trillion dollar bill, inflation spiked.  Spending, printing, and borrowing trillions of dollars, as Biden did contributed heavily to Bidenflation.  The surge of government money devalued the dollar. 

See 

Biden Blames Businesses for Inflation, but His Own Numbers Refute Him

With the implementation of the far left’s big-spending agenda, Biden ushered in 40-year-high inflation as the government spent, borrowed and printed trillions of dollars it didn’t have. That devalued the currency, which caused prices everywhere to rise.

This is because one of the functions of money is that of a measuring tool. If a yardstick were to shrink from 36 inches down to just 30, it would take 120 of these shortened yardsticks to cover the distance of a football field, instead of 100. As the dollar has lost value, it takes more dollars to measure the value of the things we buy.

Over 17% more, to be precise, since Biden took office.

 From the Associated Press

AP FACT CHECK: Biden skirts blame on inflation

THE FACTS: Biden sidesteps reality. Government spending has been a clear factor behind rising consumer prices, though it’s not the only one.

Biden last year signed a $1.9 trillion coronavirus relief package known as the American Rescue Plan — and many economists say that caused inflation to run higher than it otherwise would. There are multiple sources for inflation including global supply chain issues, the pandemic, stimulus from the Federal Reserve and, now, the Russian war in Ukraine.
But the problem is that Biden pumped more money into the economy than it could handle. Administration officials said before the relief package was passed that the greater risk was do too little to help the economy than to do too much. The implicit risk was inflation, though the tradeoff was faster hiring and stronger growth. Biden got all three: the hiring, the growth and the inflation.

Harvard University economists Jason Furman and Larry Summers – both officials in past Democratic administrations – warned of inflation rising because of the size of the relief package. Many conservative economists joined them, including Michael Strain of the American Enterprise Institute.

I will wait for your correction and apology.

John_C_87

@Dreamer
In the simplest term expantion.causes inflation.

John_C_87

@MayCaesar

Inflation is simply reduction of value of currency as a consequence of increase of its supply or reduction of its demand.

I disagree currencies are not all tied to a volume of debt and type of debt it can cover. A Federal Reserve Note is connected to all debt as a legal tender. The cause of a loss of value for a nation has a great deal to do with how it can hold its justice’s system. There are two ways to describe expansion natural and forced.

GiantMan

John_C_87 said:

@Dreamer
In the simplest term expantion.causes inflation.

I don't think they are talking about cosmic inflation.

jack

@Dreamer

Hello Dreamer:

May Caesar said it right in her/his first sentence.  In it's simplest terms, it's the expansion of the money supply..  When more money is added, the cost of goods and services are bid up so as to absorb the excess.

Why did the money supply increase?  

Well, when the government spends lots of money, like it did during Covid, they simply printed it, and it took about 18 months for the excess cash to work its way through the economy...

excon

just_sayin

jack said:

@Dreamer

Hello Dreamer:

May Caesar said it right in her/his first sentence.  In it's simplest terms, it's the expansion of the money supply..  When more money is added, the cost of goods and services are bid up so as to absorb the excess.

Why did the money supply increase?  

Well, when the government spends lots of money, like it did during Covid, they simply printed it, and it took about 18 months for the excess cash to work its way through the economy...

excon

Just admit it Jack; what's in your prison wallet?  Answer: Not as much now that Biden is president.

Dreamer

@just_sayin

This is a reminder of why I don't bother to argue with MAGA. I'd be better off spending my time reading books. 

"The Trump administration decided to end a $200m early warning program designed to alert it to potential pandemics just three months before it is believed Covid-19 began infecting people in China."

https://www.theguardian.com/world/2020/apr/03/trump-scrapped-pandemic-early-warning-program-system-before-coronavirus

I don't even try for 100% accuracy, the perfect is the enemy of good. Even the best sources on the Internet make mistakes and have retractions.  The far right focuses on minuscule errors, gotchas and then makes wild accusations of malicious intent and exaggerating the flaw in a whataboutism. Ignoring 30k lies of an American president, Russians using fake news to interfere with elections, and reliance on questionable sources. 

 Case in point hard hats, never-mind the fact that hats vary by manufacturer or Snopes corrected their error that far right new sources I've never seen do. Of course the alt-right will blow up Snopes' error way out of proportion while ignoring the Orange one's flaws in a combination of hypocritical and hypercritical bias. You use the Heritage website which is way more bias than Snopes. Even the small amount of bias by Snopes a mole-hole will be turned in a mountain.

  In the end we both agree the Orange demagogue cut back on pandemic prevention despite experts foreseeing a pandemic. Does it really matter the exact amount?

  As for the pandemic response, if you read We Want Them Infected by Jonathan Howard, Biden's response was sub-par but Trump's response was worse promoting hydroxychloroquine.

"An Associated Press analysis found that fraudsters potentially stole more than $280 billion in COVID-19 relief funding; another $123 billion was wasted or misspent."

https://apnews.com/article/pandemic-fraud-waste-billions-small-business-labor-fb1d9a9eb24857efbe4611344311ae78

 

 

John_C_87

@GiantMan

I don't think they are talking about cosmic inflation.

Inflation is inflation; cosmic or economic; rises in costs can be margin related re-action..

John_C_87

@Dreamer

How do you evaluate proper inflation with improper inflation? 

PorfirioDiaz

Whats causing inflation?

Probably all those people sucking donald trumps D-etrimental campaign.


Whats causing inflation?
Alot of things to sophisticated to list them. I can name a few however.



-You can attribute inflation to issues in the middle east where pirates attack shipping containers. The delay or lost of goods cause markets back home to compete for prices raising them temporarily.

-When you have a federal state of emergency funding a state for a national emergency. This brings a bulk of products to one area and shorthands other areas causing prices to rise shortly.

-If you look back into the later years you will see how the price of lets say an employees minimum wage an employer pays has gradually increased. It used to be what 3 dollars minimum wage. We are at 17 i believe. This increase is attributed to federal debt and US currency, security bonds, and the stock market. The more debt, the higher coat of living. Without inflation there wouldnt be progress sort of say.

-Insurance companies who are packing up and not doing business in states like california. This can cause inflation by leaving the construction market susceptible to a decrease in work and purchase of building materials. This will also cause people to pay out of pocket expenses and demand government benefit applicants to rise while they mandate new laws. You dont build the industry loses profits from projected sales and leads them to raise prices for everybody to compensate the annual losses.


But with everything into effect i see no reason why any economy as solid as the United States would have any problems shrugging itnoff and balancing itself from cause and effect.


Prices will only rise higher. I remember a mchicken used to be a dollar and seven cents. Now its at 3.14. Fast food chains offering combos used to be below 5 dollars. Now, a combo is no less than 10 bucks going up 20. Thats crazy lol. Rather buy myself a steak.

just_sayin

Dreamer said:

@just_sayin

This is a reminder of why I don't bother to argue with MAGA. I'd be better off spending my time reading books. 

"The Trump administration decided to end a $200m early warning program designed to alert it to potential pandemics just three months before it is believed Covid-19 began infecting people in China."

https://www.theguardian.com/world/2020/apr/03/trump-scrapped-pandemic-early-warning-program-system-before-coronavirus

I don't even try for 100% accuracy, the perfect is the enemy of good. Even the best sources on the Internet make mistakes and have retractions.  The far right focuses on minuscule errors, gotchas and then makes wild accusations of malicious intent and exaggerating the flaw in a whataboutism. Ignoring 30k lies of an American president, Russians using fake news to interfere with elections, and reliance on questionable sources. 

 Case in point hard hats, never-mind the fact that hats vary by manufacturer or Snopes corrected their error that far right new sources I've never seen do. Of course the alt-right will blow up Snopes' error way out of proportion while ignoring the Orange one's flaws in a combination of hypocritical and hypercritical bias. You use the Heritage website which is way more bias than Snopes. Even the small amount of bias by Snopes a mole-hole will be turned in a mountain.

  In the end we both agree the Orange demagogue cut back on pandemic prevention despite experts foreseeing a pandemic. Does it really matter the exact amount?

  As for the pandemic response, if you read We Want Them Infected by Jonathan Howard, Biden's response was sub-par but Trump's response was worse promoting hydroxychloroquine.

"An Associated Press analysis found that fraudsters potentially stole more than $280 billion in COVID-19 relief funding; another $123 billion was wasted or misspent."

https://apnews.com/article/pandemic-fraud-waste-billions-small-business-labor-fb1d9a9eb24857efbe4611344311ae78

 

 

@Dreamer, first I'm proud of you.  Your post was your own words, relevant points, with appropriate references for support.    

The fact Snopes printed an article claiming Biden was wearing the hard hat correctly, when everyone could tell he wasn't, was an obvious break down in 'fact checking' that fell face first into propaganda for their preferred side.  I don't care when Tucker Carlson says something good about Trump, I know he is partisan.  He doesn't claim to be otherwise.  Snopes on the other hand pretends to be independent but is not. 

Trump did not leave the US without people in place to address the pandemic.  That claim is indeed false.  Trump appears to have been right about it coming from Wuhan, which the leftist media mislead us about.  Also, Trump moved mountains of red tape to get a COVID vaccine out in the US as quickly as he did.  Anyone with any knowledge about the life cycle of new drugs and vaccines will tell so.  In fact, before Trump left office in January 2021, the vaccine was already being distributed.  

Hey, I noticed that you have been upping your debating skills.  Great job.  

Barnardot

@PorfirioDiaz ; remember a mchicken used to be a dollar and seven cents.

I know what you mean but your got to put it in to context though. Where I work we knock off thousands of chickens and all our stuff goes to places like KFC and Mcdonalds. Years ago in reel terms chicken was very expensive but now we have lots of automated systems and the farmers bread them more efficiently. So actually you should count your self lucky because other wise your nuggets would be a heck of a lot more expensive.

just_sayin

@Barnardot
Hey Chicken Plucker, according to the New York Post:

McDonald’s insane new prices chart supersized toll of Bidenomics

Those have driven prices overall about 15% higher since Biden came in; on essentials like food and energy, they’re up closer to 25%. 

Equivalently, think of it as having slashed the income of a typical family by close to $5,000.

Mortgage rates are cruising toward 8% as the median home price hovers near $420,000.

As CBS reported:

Photo of Connecticut McDonald's $18 Big Mac meal sparks debate online

And Yahoo Finance reported in

Fast Food Prices Have Risen 6.2% in 2023 — Here’s How Much More a McDonald’s Big Mac Now Costs

Over the summer, the average cost of a Big Mac in the U.S. was $5.58, according to CBS — up 69 cents from January 2020.

America just can't afford more of Bidenomics.