Why Has There Been So Little Consumer Price Inflation?
Prices of consumer goods have grown rather slowly in spite of sizable money supply growth. Why is there a gap?
Prices of consumer goods have grown rather slowly in spite of sizable money supply growth. Why is there a gap?
Prices and purchasing power are determined by how individual consumers value goods and services. The "velocity of money" won't help us understand prices or the money supply.
Although politicians lecture private companies for raising prices, it is governments that have for decades raised the prices of goods and services by limiting supply and raising costs.
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More money creation doesn't necessarily mean higher consumer prices. But, if production is falling while consumers use their stimulus checks to buy food and clothing, we could see noticeable price inflation.
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Although the money supply has greatly increased, accompanying growth in production has it possible to keep the current system of immense debt increase going for a long time.
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