inflation is not the same as increased prices.
This sentence is completely detached from reality. If a basket of goods increases in price there´s inflation. Tell that to the lady buying in the supermarket. Her grocery bill increases 30%. But you reach to her and say: "No ma´am that´s not inflation". She will look at you as you are a stupid.
Maybe we can create a different name for it. Inflaxion. Yeah not inflation. Inflaxion.
The official definition: "The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services."
If there's a bird flu and eggs go up in price, that's not inflation. That's supply and demand response.
That´s inflation. Operated by the supply side.
Law of demand is the most important economic law. And should be written in school boards.
You then mention the government printing money (or telling The Fed to). That is inflation. Like putting air into a balloon, money is being put into the economy. The number of dollars is inflated. More dollars means price goes up.
No that´s not true. That´s only taking account the demand. And not the supply/offer side. The price of a good and service is the direct result of the confrontation of demand and offer. If the government reduced the tax on goods to zero. There would probably be an automatic reduction in prices (in the long term it would mean indirectly more disposable income).
If you take away regulation the supply side can explode and outweighs the demand. The supply is nowadays kept artificially low. And the government strives to create monopoly and cartels who fix prices. To control who gets to supply the economy. In Ukraine it´s the same shit. They want to cut out Russia gas. Less supply. Less actors to control. In the end it´s about control. By enacting this retarded policies (bailouts) useless companies keep doing business because they have lobbied or bribed. And good companies are not possible because initial cost of regulation makes them impossible to operate until they reach a certain level of business volume threshold.
The price is set on a scale one side demand. The other side supply. It´s not only money printing obviously. Each side has a weight. Saying the scale only has demand is not true. Because reality says otherwise.
DEMAND +- SUPPLY = PRICE Equilibrium
Friedman did a disservice placing the power of fixing prices on central banking. Basically telling governments are useless. And should do nothing. It might one reason why we are in the shape we are.
If the government taxes your income 100%. You think it will not affect prices? If the government issues a regulation saying houses should only be built by dogs. Or only monekys. You think the housing prices of new houses would increase or reduce? Or if it issues a regulation saying only monkeys can bake bread. All regulation costs are passed on to the consumer.
More regulation less supply. Less supply if everything stays equal. Higher the price of a good and service.
Monetary policies should be neutral. It´s up to the governments to let economic agents fix their prices. Central banking as it is now it´s communism. Central planning of prices never works. Because economy and society is too dynamic for any central authority to determine what´s right or wrong in terms of production.
Governments should only create conditions for business to operate. Roads, etc. This is the catholic church economic doctrine. Or was at least with John Paul II. Governments are not to interfere with economy. But create conditions for businesses to thrive.
Bitcoin is worthless. But if people believe it has some worth it can go up in price. It´s a scam. Sanctioned now by governments. But scams can last a lot of time. And in the meanwhile you can make money out of it. When I was young some friend of mine owned Magic cards. I never understood the deal with them. I paid some money to a friend to make me a deck. But still couldn´t figure out what the nerds thought so valuable about those cards. But if you found the right cards nerds would pay you a lot. That´s bitcoin. I could invest in bitcoin. As I could invest in a pile of shit if enough idiots bought it. I will stick with houses.
What is sound is first breaking central banking. Central banks are subjects to law. And create regulation in banking which is sound. Resintating the law Clinton repealed. Glaxton steal. But most importantly repeal all regulation on cash. Cause cash and bills are the true bitcoin. The same on taxes. But the elite doesnt want that cause it loses control on who can or cannot operate.
From regulation comes bribes. From bribes selective criminal procedures. From there control.
Truth be told. New elites need to have some common grounds. Christianity. I would rather be poorer and not have transgender and fags than richer but having to endure gay flags.
