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1.Velocity of money. 2.Inflation comes in a time of a young growing demographic as they bring new innovations into the mainstream of society. We are the opposite of that now.
I thought national borrowing & debt produced inlfation.
Look when inflation started, the mid 60's. That was the year the first boomer left home to start his own life. Doing so required housing, cars, furniture, and places to put these people to work. That required buildings, office, factory, retail expenses and all of those things needed to be done between 1966 and 1981 when all of the boomers entered the workforce at the same time. Kids and young adults are very expensive and provide very little productivity. Once they were all in the workforce, inflation subsided.
Most economists grew up in the 70's and associate the stats with what caused inflation, they look at the symptoms, not the dieses (people).
I thought national borrowing & debt produced inlfation.
We've had tremendous inflation that hasn't been included in the government statistics. Look what it costs to buy a house today, compared to what it did 10 years ago. This somehow isn't considered 'inflation' because a house is considered an asset, but to the person who wants to buy, it's definitely inflation.
With respect to goods that can be produced in a more portable manner, we've largely escaped inflation on these by moving production outside the US, and running a huge trade deficit to import them. In this manner, we are exporting our inflation, or at least the potential of it, as large quantities of dollars are held outside the US. If they ever make their way back in, we'll have tremendous inflation. In addition, you can't export your inflation in this manner without also exporting your wealth, bit by bit. And that is what we have chosen to do. We continue to export our wealth by spending more than we earn and borrowing from abroad, so that we can continue to live at a certain level today, at the expense of tomorrow.
We've had tremendous inflation that hasn't been included in the government statistics. Look what it costs to buy a house today, compared to what it did 10 years ago. This somehow isn't considered 'inflation' because a house is considered an asset, but to the person who wants to buy, it's definitely inflation.
With respect to goods that can be produced in a more portable manner, we've largely escaped inflation on these by moving production outside the US, and running a huge trade deficit to import them. In this manner, we are exporting our inflation, or at least the potential of it, as large quantities of dollars are held outside the US. If they ever make their way back in, we'll have tremendous inflation. In addition, you can't export your inflation in this manner without also exporting your wealth, bit by bit. And that is what we have chosen to do. We continue to export our wealth by spending more than we earn and borrowing from abroad, so that we can continue to live at a certain level today, at the expense of tomorrow.
Much of that is true but that is more a loss of purchasing power due to a devaluing dollar than it is to much money chasing to few goods.
Much of that is true but that is more a loss of purchasing power due to a devaluing dollar than it is to much money chasing to few goods.
The end result is the same either way. In a global economy, the revaluation or devaluation of your currency is also caused by supply and demand. The dollar devalues because there are too many of them out there, chasing the foreign goods. It's just a variation on the 'too many dollars chasing too few goods' argument for inflation.
The end result is the same either way. In a global economy, the revaluation or devaluation of your currency is also caused by supply and demand. The dollar devalues because there are too many of them out there, chasing the foreign goods. It's just a variation on the 'too many dollars chasing too few goods' argument for inflation.
Very true. An interesting argument I have heard about why the dollar is increasing in value against other currencies is because most world debt is denominated in dollars and the more trouble people have in paying back debts the more dollars are needed.
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