Causes of inflation

Previous Topic Next Topic
Posted by Radishrain Radishrain
Right now, there's a lot of hubbub about inflation. People are acting like it's President Biden's fault, but they're ignoring that it's a global problem (not a USA problem only):

That article is insightful, but there are more causes of inflation that it doesn't address (although I'll try to address the one it does mention, too). Here are some potential causes of inflation:

1. Supply is down (which means people can charge more for items; this is the one the article hit on; however, fewer people are being paid, too, I imagine, so that probably balances things out a little; I mean, if people aren't being paid, there's less money to spend, so money is more valuable; as long as the rich people don't go buying billions of loaves of bread or something, that should be a source of deflation in many markets, but it could increase the cost of already expensive things)
2. Cryptocurrency (Cryptocurrentcy means there's additional money circulating that isn't national currency, so national currency isn't going to be worth as much; it's as simple as that. The more people value cryptocurrency, the less they're going to value national currency. The more cryptocurrency deflates, the more national currency inflates. Inflation potential here wouldn't be so bad if people didn't actually spend cryptocurrency like real money, but with PayPal accepting it, you can buy pretty much everything with it--instead of with national currency, which makes national currency less important--and that's a big problem, even for people who like cryptocurrency. National currency is a major source of regulation and national control. If it's devalued, that could lead to a lot of problems and global instability.)
3. People dying. There's a pandemic. Their money has to go somewhere. That leads to inflation.
4. If people are spending more money that they otherwise would just save, that could cause inflation among the rest of the populace. Unspent money can effectively act like money that doesn't exist. If there's less money in circulation, inflation is probably going to go down. It does appear that people have been buying up just about everything for a while now; so, it could be an issue.
5. General inflation that usually occurs already (much of this could be political, but not just with Biden--you have to consider all the presidents that went before him). This has been balanced out in large part by a rising number of products and services (more ways to spend your money, and more things to spend it on means your money is more valuable, especially if a lot of those things aren't even necessary). However, if we have a declining number of products and services, and people only care about necessary stuff, then that's a big problem, inflation-wise.
Feedback, Links, Privacy, Rules, Support, About