There's a lot of talk about inflation and its causes. Is it corporate greed? Supply chain issues? One clear base cause of inflation less talked about is having an inflationary currency supply. Any other inflation caused by supply chain issues, corporate greed, lack of market competition, etc is just added on top of that. Fiat...
The cause of inflation is: getting something for nothing. One can see how this notion would be unpopular, because, well, literally anyone would like to get something without working for it/for free. And some people are better than others at doing that, with varying definitions for "better", "people", "something", and "nothing".
The classic example of inflation is the one everyone knows: a store that raises prices because of theft. A skateboard maker builds skateboards, a skateboard gets stolen, the price goes up to cover the loss of the things that went into the skateboard (materials, labor, etc) so the builder can still eat. The price of skateboards has inflated because of theft; the thief got something for nothing. Fact of life.
Inflation in currency is caused by fractional reserve banking; the ability to lend more currency on paper than actually exists physically. You actually have to print more money in order to keep the system from grinding to a halt. The inflation would eventually resolve, but when interest is applied to the lent money it does not. Why manipulating the interest rate is related to combatting inflation lays in here. Find a decently long YouTube video about how fractional reserve banking works to find out more. I'd provide a link but I can't find the good one right now. Suffice to say, inflation went up, because the banking system got money for having money. Fact of life.
Prices way over the cost of the good due to corporate greed is another one, pretty similar to the classic theft example, just modified. The price of something goes up, not to cover a loss, but "just because" someone wants more money, when it comes down to it. You can quarrel all day about the fine details on that. Suffice to say inflation went up because they got more money for something by essentially doing nothing more. Fact of life.
The interesting thing about that last one is that the problem is compounded by (what could be considered the "excess") money going back into the fractional reserve banking system, especially without there having been any real work done to justify the added cost. You can kind of get a glimpse of how the interest rate is tied to inflation, and why raising it also doesn't fix everything; cheaper money means people don't care about the needlessly higher price of things as much, so if you raise the cost of money people have to be concerned again. But by raising the rate, the banking system is getting more money for no "real" reason, so...
So I suppose, knowing what we know now, it might be better to say, rather than "something for nothing": receiving something for less than it is genuinely worth, or the flip side, selling something for more than it is genuinely worth, or maybe just simply, getting value without working for it.
If this all sounds insane to you, and you are thinking of replying, before you do, you really should learn about how fractional reserve banking works. It is the thing that underpins everything in modern life, and is the literal foundation of our world economy. Not knowing how it works is like not knowing why you get sick from drinking still water on the ground. You can still get along without knowing it, but if you know, it sure helps you to navigate the world better. Do watch the most detailed video or something you can find.
We shouldn't have to work 40 hours a week to afford a basic life. We do because our currency is constantly losing value. This is by design.
There's a lot of talk about inflation and its causes. Is it corporate greed? Supply chain issues? One clear base cause of inflation less talked about is having an inflationary currency supply. Any other inflation caused by supply chain issues, corporate greed, lack of market competition, etc is just added on top of that. Fiat...