Quote:
Originally Posted by Goriders
If your dollar is worth less that covers everyone using the dollar at any point in time.
“When we print money, the supply of money increases, demand for goods increases. If the supply of goods stays steady, but doesn't increase in line with demand, then prices increase. What you bought with $100 yesterday costs more than $100 today.”
This along with the impact of all of the energy taxes/policies making it more expensive trickles down to everything in the supply chain.
So everyone is poorer than they could be minus the above. The above are all policies and decisions directly made by the current federal government.
Let me know if this describes it well enough.
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Not entirely wrong, but the idea that the supply of money has a direct 1 to 1 link to the rate of inflation is pretty flawed, almost as much so as the invisible hand. There are other things driving the economy, like idle capacity, savings, debt, import/exports...
I think you'd have a hard time arguing the money supply was even in the 3 for drivers of inflation.