/biz/ - Business & Finance

[Anonymous No.9060510]

Will someone explain inflation to me?

A coke was 5 cents many years ago, and that price made sense because it was proportional to the amount of money people have. Today, a coke is however many dollars.... which is also proportional to the current amount of money people have. The number went up but the price didn't.

I can see why this would look bad to someone older but I don't understand why inflation is such an awful thing that everyone is scared to death of.

[Anonymous No.9060792]

>why are rising prices bad

[Anonymous No.9060852]

It's not, inflation is actually a decent thing at low levels. It's just rural and suburban Trump supporting retards that can barely read that hate inflation.

[Anonymous No.9060860]

>>9060510
>why is inflation bad

[Anonymous No.9060879]

>>9060792
>>9060860
The prices aren't rising, well technically they are but it's much easier to make more money so it evens out
>>9060852
explain

[Anonymous No.9060882]

>>9060510
because inflation goes up at a higher rate than wages, so now that coke passed from being 0.01% of your salary to 0.1%

[Anonymous No.9060896]

>>9060879
You need an inflationary currency or no one will ever spend their money

[Anonymous No.9060907]

>>9060852
this cannot go on forever.

[Anonymous No.9060909]

inflation is an ingenious way to extract value from existing coins without physically touching them. and it allows the state to fund itself

tl;dr - inflation is a way for state to steal your earned monies value from you and to fund its operations

[Anonymous No.9060915]

>>9060510
Because wages didn't rose as much as prices of goods rose. So end of the game with high inflation your student debt will be harder to slave off while you make proportionally less in purchasing power than your great grand dad working in a coal mine without any school education. And don't start about QE and the amount of circulating money depreciating the dollar you earn even more, while the prices rise further

[Anonymous No.9060918]

>>9060896
or no one will spend their money on shit they don't need**

[Anonymous No.9060921]

>>9060510
ther is a constant disadvantage over time for the customer is this system

[Anonymous No.9060937]

Because your savings are melting away so you will have to wageslave for Schlomo until death

[Anonymous No.9060938]

>>9060510

https://mises.org/library/inflation

you're welcome OP

[Anonymous No.9060939]

[Anonymous No.9060944]

>>9060918
Niggers, s.oyboys and women do that why they get special treatment from the yid

[Anonymous No.9060953]

>>9060918
This, you can't have service sector consumerist economy without inflation. No one would waste money on experiences or things they were planning to throw away in a few years.

[Anonymous No.9060965]

[Anonymous No.9060982]

>>9060852
>inflation is actually a decent thing at low levels
Thanks Paul

[Anonymous No.9061019]

You are all fucking retarded, the supply of money increase. There is more money so it is less valuable. Inflation is good at around 2 percent, it is a tool the government uses to play with the economy, however, if it gets higher above 12-15% it damages the economy

[Anonymous No.9061035]

>>9060510
im guessing some things are proportional or cheaper today (electronics, clothes, media) while things like housing, luxury goods and fashion are more expensive.
not sure about food.

[Anonymous No.9061094]

That doesn´t tell you anything.

[Anonymous No.9061097]

>>9060510
Inflation is not what you think. Central banks love inflation in fact their goal is to keep it around 2% do you want to know why? Because the central banks who print at will need inflation in order the private owners of the central banks can get their guaranteed vig. No inflation means no skim for the central banks private owners its as simple as that.

[reluctant kneepad girl No.9061155]

The premise of argument sound, there nothing wrong with inflation

The problem comes from human inability for perfectly active manage all assets for adjusted with inflation.

I.e. inflation steals value from poorly managed assets i.e. 99%

[Anonymous No.9061168]

>>9060953
>No one would waste money on experiences or things
>women would say "Hey! Let's get married next year when it's cheaper"
>women would say "I'll buy those shoes next week instead!"
>Men would tell each other "Let's skip the game - next season admission will be lower!"
>babies would gurgle "I can do without shitting until diapers are below $10 each!"
inflationistas will get put against the wall when cryptocurrency becomes a thing

[Anonymous No.9061169]

Inflation is an automatic tax. Anyone arguing that it's "good for economy" because people wouldn't spend a stable currency is a brainlet. You can very well have an economy with a stable currency and people will eventually pay for the necessary things. Atm we have a world where everyone is addicted to spending and materialism. The elites are really fucking the people badly and nobody even realises that.

[Anonymous No.9061177]

>>9061155
Ok but how-so?

[Anonymous No.9061284]

A house originally costs $1000, but this is fine because it's proportional to the amount of money people make. That same house now costs $1000000, now pay us taxes on all those capital gains you made, goy.

[Anonymous No.9061290]

It lets the powers that be steal your money without anyone noticing because the numbers in their accounts don't go down.

[Anonymous No.9061359]

>>9060852
>I WANT A GARBAGE ECONOMY WITH NO JOBS
holy shit get the fuck off/biz/ you keynesian brainlet

[Anonymous No.9061375]

>>9060896
During the gilded age we had a deflationary currency and we had the industrial revolution
You are wrong
Kill yourself

[Anonymous No.9061398]

>>9061168
THIS


Keynesians need to be thrown from helicopters

[Anonymous No.9061403]

Inflation is good for state-controlled economy. But we, common customers, are to suffer from it.
I don't know how is it in the US, but in Russia it has gone way past "necessary evil".

[Anonymous No.9061421]

>>9060510
inflation is a good thing for multiple reasons
>pay off past loans easier
>more incentive to buy shit, your money will be worth less in the future so you better use it now (thus stimulating the economy)
there are some other reasons but i am too lazy to type them

[Anonymous No.9061450]

Inflation is theft, it steals value from people's savings and transfers it to the new money that is created.

[Anonymous No.9061456]

If we had a naturally deflationary economy, living standards would dramatically rise leading to a 2 day working week.

The powers that be don't want this.

If you support keynesianism or inflation you are a fucking tool.

[Anonymous No.9061477]

>>9061398
Fuck Keynes. Hayek was right.

[Anonymous No.9061481]

>>9061421
Anyone supporting inflation shouldn't be on the cryptocurrency board.

Inflation encourages massive levels of debt and causes poverty.

[Anonymous No.9061493]

>>9061421
>pay off past loans easier
ehm, no?
there's interest rates , and they're above inflation rate

>more incentive to buy shit, your money will be worth less in the future so you better use it now (thus stimulating the economy)
for who though? consumerism society feeding the 1%

[Anonymous No.9061580]

>>9060510
>minimum wage increases
>now businesses have more overhead to pay for
>they pass the cost along to the consumer
>price of all products increase
>people complain that things are becoming too expensive and minimum wage is not a living wage
>minimum wage increases
>now businesses have more overhead to pay for
.........
Repeat x 1000
That's how a coke that cost 1 cent when your granpappy made a dollar a week now costs 2 bucks but your dad makes a lot more

[Anonymous No.9061626]

>>9061477
Mises and rothbard were more right.

[Anonymous No.9061633]

>>9061019
Well said, I was awake during my high school econ class too! : - )

[Anonymous No.9061644]

>>9061580
>Minimum wage driving inflation

Lmao

[Anonymous No.9061659]

>>9061626
I dont see any of them as contradicting each other, they were all Austrians. Only guy that is really a black sheep amongst the Austrians is Lachmann.

[Anonymous No.9061780]

>>9060510
If everything was perfectly adjusted, i.e. add a 0 to everything, then yes there is no issue, but that's not the issue.

Inflatable, fiat currency allows the government to "fund" it's programs, generating massive debts but guarantees easy paychecks and easy votes.

Because we let governments print whatever they want, all your financial savings lose value. Moreover, you now suddenly owe a lot more tax to the state, to fund blacks and missiles (taxes don't pay for this anyway, needing more bonds and generating more debt in an exponential growth).

Additionally, because your savings lose value, you also need to invest more into industry, which of course generates vast over production and an economic bubble

[Anonymous No.9061886]

The industrial revolution in the USA happened under DEFLATION.
Massive increases in living standards happened during this time.

Remember that.

[Anonymous No.9061920]

inflation as it stands today is just used to further government interests. everyone's savings lose value, but the people at the top don't really care because their wealth is stationary and only goes upwards. you can see how inflation is bad for your average person's cost of living.

don't listen to fags like this white-knighting for it.>>9060852

[Anonymous No.9062006]

>>9061580
you're mixing it up

inlfation appears from printing new money, making the old money worth less

imagine
all dollars = 1

if there's 100 dollars and they're equal 1, each dollar is worth 1/100

but if they print another 100 dollars now they're worth 1/200, meaning the 100 dollars that already existed now are worth half as much

now, when inflaion goes up and the price of things go up, it's an illusion, actually they're worth the same share of the total, just that each dollar can buy less
see >>9060939
>>9060965

now, wages go up because complain that their wage can't get them enough to live (which is true, since their wage stays the same but the dollars are worth less)

so yeah, inflation comes before the increased wages, they don't print money to put it directly in the pocket of the people, they print money to make money and eventually, when inflation kick in, it ends up in the pockets of some


TL;DR: >>9061644

[Anonymous No.9062929]

Inflation appears by various means, but purely printing money isn't one. The money has to enter the economy, and its means of entry is how inflation happens. "Inflation" as a concept is a nebulous category for the general rise in price level, though different things have price levels that rise at different rates. Food and energy is erratic, not included in core CPI because many things could cause them to go up or down. It may even be that if you kept a price diary, you'd note that chicken has "been on sale" at the grocery store for half the time you've checked prices. This kind of fluctuation could be as much as 20% within a year for any average grocery store. There are also products that see deflation in the CPI. I don't know about all years, but I know some years electronics will be down.

But anyways, point is dollars don't have a fixed value for any given entity in the economy because they don't know how many dollars are out there except through their relationship to certain other prices passed to them. If they did, it would be as simple as saying that every new dollar literally reduced the value of every other dollar by a ratio of it to the total stock of dollars. That is empirically falsified by the specific variation in change of price level. Many things can effect price levels. It's often argued online retail has diminished inflation because of its highly competitive nature with brick and mortar.

[Anonymous No.9063043]

>>9060510
The problem is that the price scaling is not linear. Take colleges for example. The price of admission has gone through the roof compared to old prices if you adjust for the inflation. Let’s say a 5c coke scaled up would be 90 cents now. Instead, you get charged 2 dollars for a coke. Furthermore, anyone not holding investments gets double fucked by inflation, and most poor people who hold 2-3k cash on them suddenly see their cash losing value, since their 2-3k can’t buy as many things against the rising prices.

[Anonymous No.9063166]

>>9062929

Oh yeah, the point of this was to say that inflation hits people in different ways. Depends where you are in the chain of consumption/production and what you're buying. Long term it is mostly going to effect your savings, so you just want to watch it to consider how much buying power your money will have in the future at the rate you are saving.

[Anonymous No.9063384]

>>9060510
The key to understanding inflation is to realize that there is no single number for "inflation". The CPI, for example, which is one of our best gauges of inflation, is still just a gauge, and not a perfect model. Nobody actually experiences CPI inflation -- the elements of the CPI index are so many and diverse that no single person actually experiences the 2% inflation or whatever they say there is.

Some people will experience higher inflation than other because the goods they buy happen to be the more expensive goods.

I see your point -- that in theory, if inflation just results in a wash, where prices always adjust to keep everything always equal, then wheres the harm?

The problem is that inflation is not a wash -- it randomly redistributes wealth in a way not determined one's economic productivity. Further, as prices fluctuate, the uncertainty surrounding them can harm economic growth by cautioning the more risk averse investors from enterprise. It's not a wash -- it's quite damaging indeed.

At the same time tho, the inflation incentivizes capital to invest, cuz if it sits on its ass, it will lose it's value. Inlfationary economics is like a constant ratrace of everyone trying to tread water.

[Anonymous No.9064146]

>>9060852
>rural and suburban retards
If I ever hear someone say this unironically in real life
My God