Quote:
Originally Posted by GGG
Raising interests raises LIBOR which increases corporate debt servicing costs which stops borrowing to pay dividends/buybacks and limits expansion. The same thing occurs on the personal income side:
The end result is people and businesses will buy less stuff.
The cause of inflation is excess money to chase goods. Corporations profiteering is a symptom of excess money chasing too few goods. (Wage growth is also a symptom of the same problem).
So until the supply chain is improved again we need to reduce the amount of money to stop corporate profiteering and wage growth which is driving inflation.
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This is the theory.
The 'theory' doesn't work if you have corporate greed happening with food prices as an example.