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poVoq ,
@poVoq@slrpnk.net avatar

This kind of naive and simplistic view of inflation is long debuked. Maybe read up on current thoughts: https://strangematters.coop/supply-chain-theory-of-inflation/

SwingingKoala ,
@SwingingKoala@discuss.tchncs.de avatar

Most people take it as given that printing more money causes inflation, and they can be forgiven for thinking so, as it has been hammered home to them by mainstream economics professors in every econ 101 course the world over for many decades.

The central banks contradict this themselves all the time, they lower and raise interest rates, which leads to changes in newly created money, to modify inflation.

makeasnek OP , (edited )
@makeasnek@lemmy.ml avatar

Increasing the money supply, all other things equal, decreases the value of the currency. It's that simple. The price, or value of the currency is the net of supply and demand for that currency. Same demand, higher supply, lower value per unit.

This link argues inflation is more complicated than that, which I agree with in my opening sentence, inflation has many causes. Of course it's more complicated than that. But that doesn't change the underlying basic reality that inflating the supply on its own reduces the value of the money. Supply and demand is simple, unpacking which % of the 10% inflation experienced in an economy is caused by money printing or push-pull or supply chain disruptions is a more complex and possibly impossible to fully answer question. The complexity of answering that question is a good argument for why we shouldn't give central banks the ability to change the money supply or interest rates, as they cannot have the information required to know whether raising interest rates will fix inflation because they can't even know for sure what is even causing it. I mean, inflating the currency supply is certainly a part of it, but picking apart the other pieces is when it enters that grey area of unknowability.

poVoq ,
@poVoq@slrpnk.net avatar

Sure, but you argue with this extremely oversimplified view on inflation as if that is that is causing the plight of the middle class and that a deflationary currency would solve that. This is complete economic nonsense and strait out of the propaganda book of crypto-currency and goldbug shills.

PeggyLouBaldwin ,

Increasing the money supply, all other things equal, decreases the value of the currency. It’s that simple.

how can we test this theory? and would you ever concede it has failed, or will all exceptions be thrown under "all other things weren't equal"?

this theory has no genuine predictive value. it's a tautology

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