Inflation. Is it so bad for the AVERAGE American?

jrh72582 said:

Amen. Preach the truth.

As an addendum, I do think economics should be mandatory for at least two years of high school education. Some people aren't so much stupid with money - they're just ignorant until they make that first mistake. If they were taught gooder (hehe), then maybe they'd know better.

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tnrtinr said:

Lets try this again. You have given me lots of information but JUST focus on these points. This should be VERY easy for you to ONLY tell me the flaw of each individual point - please stop adding exogenous variables / information to the situation that I am presenting to you.

1. I have already made the point and provided examples that show that not expanding (fixing) the MS to will cause deflation because the currency will get more rare as there are more people demanding the same amount of currency.

That depends on the velocity of the money supply, which is decreased as more money is added to the money supply. Any alteration of the money supply is inflationary.

2. I have said that a MS that increases by too much proportional to the economy will cause inflation because the there would not be a scarcity of money.

Any expansion is inflationary. God, you sound as stupid as Greenspan with his absurd claims that they managed to get money to act like Gold.

3. I then used logic to explain how a money supply that expands with the growth of the economy as well as shrinks with contraction of the economy (what that measure / formula / indicator is - I don't know) would not cause inflation because there would be adequate money to facilitate economy (not scarce - not abundant).

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superhighme said:

I agree. They weren't even offered in my school. The problem is... the minute you turn 18....credit card offers are piling up in your mailbox. they want you to get their cards RIGHT NOW! and most of 18 year olds do. I was guilty. The difference is between people WHO KNOW.... that the money they are spending is borrowed money that they will pay interest on over time and the people that think its free money and they'll just pay it back slowly...or pay it and then spend it.

Personally, I couldn't even imagine having a huge amount of credit debt. to me...even my $800 on my card is TOO much. Im working to pay it down all the way after the recent bill passed regulating credit card companies because Im certain things are going to change. I will pay it all the way down and then only spend $100/mo and then pay $100 before my monthly finance charge goes through. This way I keep rolling credit and my score keeps going but i dont have large debt. Also, Ive had my card open for almost 6 years. I also have other cards that are open just for the purpose of increasing my score because credit scores are also based on the length of time you hold an open account.

Personally, I was not told how to manage my money. Sure...my parents taught me little things like put some in savings and really think about your purchases and dont spend frivelously, but I think that this type of shit should just be common sense and if you find yourself farther in debt than the amount you make in a year and your crappy job because you didn't go to college and its all you can get then tough shit.

Some people make just over $9k a year at their dead end minimum wage jobs but their debt is $9k? thats rediculous. Dont be a fuckwad.

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TheBrutalTruth said:

I think this is the first time that you've mentioned anything about the money supply growing and shrinking with the economy.

Though the talk about expanding and contracting the money supply ignores the velocity aspect (the movement of money) which is what really defines the economy. If you gave everyone a million dollars the result would likely be stagflation as everyone quit their day jobs and prices soared to match the suddenly soaring demand.

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superhighme said:

This way I keep rolling credit and my score keeps going but i dont have large debt. Also, Ive had my card open for almost 6 years. I also have other cards that are open just for the purpose of increasing my score because credit scores are also based on the length of time you hold an open account.

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NoDrama said:

tnrtinr your hypothesis is IMPOSSIBLE, how can anyone answer your question? Unless you can somehow make a population increase by 100 fold overnight you will never know how it would work. They can make as much money as they want in an instant, but you cannot increase or decrease the population in an instant. So it does not matter what could happen, because it cannot happen at all. Its not inflation anyway, your hypothesis deals with supply and demand.

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TheBrutalTruth said:

Not even that much ND, the question is too fucking simplistic. It's like the BS questions they ask in 100 level classes.

And even if there is an increase in demand, there is also an increase availability of labor, so there is a natural trend for prices to go down, limiting the increase in demand for money, as everything becomes cheaper.

Natural trend of things is deflation, because there is an ever increasing amount of human production capacity. Which is not a result of the increase in demand (which is nothing more than a hypothetical) ignoring the increase in labor which is what triggers the deflation.

Besides, money (when it's not controlled by Keynesian Worshipping Myrmidons) automatically fluctuates with the markets anyway as old goods become less desirable and new goods dry up. That's why capitalism works and socialism/statism doesn't.

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NoDrama said:

EXACTLY! The natural progression of prices is to get cheaper over the long run, but the government/banks too big to fail cannot make fortunes if that were the case. Heck government would barely be able to afford a small army and just enough to run the bare essentials (Like it SHOULD be) if there was no inflation. Alas they NEED the inflation as the gubbermint is usually one of the first users of newly created cash so they get the full value of it before the velocity of money increases and inflation sets in. Kind of like when FDR confiscated gold, once it had all been collected he revalued it from $20.67/oz to $35/oz. Thus making every single persons dollar worth much less and the governments gold worth much more.

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medicineman said:

Geeze, with all this childish bantering about who is smarter on ecomomics, It's a wonder you all don't run for office and just straighten this mess out. Such genious going to waste, what a shame. Me, I know how to balance a checkbook, and count to a thousand, without my fingers and toes, pretty much all the economics I need to stay focused. You geniouses figure out the worlds money problems, then give me the short answer., I'm not interested in making a career out of economics. From what I can gather from the rubble of this thread, we're screwed anyway.

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