2021-08-23 at 2:49 PM UTC
honestly the more I look into it the more confused I become. ive looked into classic, neoclassical, marxist, neoliberal, austrian, whatever fucking economic theory you want and everytime I come out more confused as to just what inflation is and how it works, relative to money supply and supply of actual goods. I don't want to lay out a whole fucking thesis here, but the more I've read the less certain I am about what it is, what the effects are, how it happens, if its good or bad, and how one should think about it in relation to ones own money.
this is especially relevant to cryptocurrency discussions as those are inherently deflationary currencies, and the incentives that inflation vs deflation gives is very interesting. none of those things concern people that are balls deep in doge coin but you know who cares what exactly your monetary system is based on? as long as its based.
2021-08-23 at 4:17 PM UTC
think of it like bringing 100 tons of gold from mars to earth and lets assume there was 100 tons of gold on earth.
now theres 200 tons so it is worth half as less, one gram of gold now buys you $30 worth of stuff instead of $60
printing money does the same thing, makes the existing money worth even less.
problem is, printing money is necessary because you have to incentivize people to spend and exchange to keep the economy going. when money is inflationary, it encourages spending because hoarding it makes no sense when it will be worth less next year.
deflationary currency is the opposite, it incentivizes saving because it will be worth more next year. but thats not why i use crypto, its more to do with freedom and privacy than economics.
crypto is like gold but without the drawbacks because there is plenty to go around unlike hard currencies which are limited and encourage hoarding.
2021-08-23 at 4:30 PM UTC
infl8in is wat hapen to me dik wen i c ur granps
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2021-08-23 at 4:46 PM UTC
Narc
Naturally Camouflaged
[connect my yokel-like scolytidae]
Supply and demand is also a big factor. When demand for certain goods increases, so does the value of said goods. This often has a knock on effect on other related goods and services, which then knock on to others. You can also find the effect can be seasonal or be caused by certain events. For example at Christmas demand for things like turkey or chocolate increases so prices increase. During a war weapons, fuel even boots are more in demand. So then demand for things like metal, leather, potassium etc increases. These all contribute to pushing up value of other things, including labor.
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2021-08-23 at 4:54 PM UTC
Narc
Naturally Camouflaged
[connect my yokel-like scolytidae]
Cost of labor is also very significant. As prices rise people demand more so as to afford them(cost of living). A business has to consider the cost of labor when pricing their goods/services, and so prices are increased which in turn increases the cost of living so people demand more for their labor which in turn increases pricing, and so on and so on.
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2021-08-23 at 6:42 PM UTC
inflation is when you can no longer afford the things that you used to be able to.
2021-08-24 at 5:20 PM UTC
Narc
Naturally Camouflaged
[connect my yokel-like scolytidae]
Up until a couple of decades ago, before mass importation was affordable, strikes were a common thing.
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2021-08-24 at 5:27 PM UTC
more money means the money loses value
2021-08-25 at 7:15 AM UTC
All i know is a 1br apt costs $1800 and selling heroin was much more conductive to my happiness in current economic NORMS etc etc
