Why inflation What is inflation

M

marketanalyst

To bankers and central bankers, inflation is weird and a financial phenomenon.

Inflation used to 100%/year when fiat money was first created and fiat money was like bitcoins and high counterfeited and nobodody wanted cash or own cash. same with bonds. When people bought gov't BONDS payment was in gold.silver or other debts. today gov't bond, the US gov't pays you FIAT money or paper. so you have to TRUST the central bank will protect the buying power of it's paper or IOU. the gov't owes you money when you buy their Bonds.

low inflation is actually a good thing, there is peace stability and trust.
high inflation is indication of violent times, or war.
 
Well, if there is an increase in the overall supply of money, then it would make sense that each unit
of that money would be worth less than previously, and the price of goods would increase to reflect the
difference. I guess I don't see the weirdness of it. I don't know if high inflation is indicative of violent times or war ...
 
kandlekid said:
Well, if there is an increase in the overall supply of money, then it would make sense that each unit
of that money would be worth less than previously, and the price of goods would increase to reflect the
difference.
More...

Exactly.

That's why yesterday's "5 cent cigar" now costs $5.

Somebody from government is always telling us "a little inflation is a good thing". BULLSHIT! Politically motivated lie. Inflation is what the government and Fed use to obfuscate the negative effects of deficit spending.

Since the Fed's inception in 1913, the $USD has lost between 96-98% (depending whose numbers you use) if its buying power through constant "a little inflation". We've survived the 1st 100:1 devaluation. Will we survive the 2nd?
 
Scataphagos said:
Since the Fed's inception in 1913, the $USD has lost between 96-98% (depending whose numbers you use) if its buying power through constant "a little inflation".
More...

The brilliant Founders gave us that, "money is to be gold and silver coin"... so that BS money-printing inflation would never infect America. Well, it happened anyway thanks to greedy politicians and a "dumb as a box of rocks" populace who let them get away with it.

You can piss-and-moan all you want about how F'd up this all is (as do I), but we still have to cope with the reality of "how things are now".

:(
 
High inflation is bad, deflation is worse.
High inflation is a form of heavy tax on capital but at least it encourages people to spend and continue to make the system work to a certain extent (no hyperinflation).
Deflation cause people to postpone their spending as their money will be more valuable in the future. So prices are cut down to attract consumers which causes even more deflation. The economy slows down to the point it nearly stops.
Low inflation seems to be a reasonable choice that doesn't penalise too much the capital.
 
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