Regulating inflation.

There would be no economy because everyone would be dead.

 

Of course that is 100% illiterate and typically liberal. Throughout American history liberals have been for easy money( Cross of Gold speech) because it favors poor people in debt. Bernie Sanders for example was always clamoring for more money from Fed during recent housing recession to support employment part of Fed dual mandate. Do you understand now?

 

No, not at all. If you do why so afraid to tell us what the correct ratio is and why think it is correct???

 

1) if you stop consuming you die so doubtful that would ever happen in a real world
2) however, if say disease, sudden onset pessimism, or psychological depression made everyone afraid or disinterested in going out money velocity and demand could very well slow down and inflation might result depending upon if supply was affected proportionately, but this is not real world.

 

None.

 

I understand you should check the definition of 'illiterate'??

Well...how many Republicans voted for Social Security or Medicare or food stamps?

What would be your SOLUTION for an American without means who needs food, shelter or health care?

 

I've already written in these posts that inflation varies based on location...

 

So a person earning $35K gross income which is more like $30K net income, which is about $2500 per month, should be buying a $35K car which would be approximately $800/month for 48 months, plus insurance, license and maintenance...makes sense to you?

 

So you're implying demand would greatly lower and prices will then increase??

 

Well...when demand slows why does every retailer on Earth start lowering their prices?

 

To clear inventory. And, actually, that might be deflation since deflation is not the exact opposite of inflation. Inflation occurs when the money supply expands. Deflation may occur for different reasons, such as increases in productivity.

 

not really since widespread decreases in productivity would be matched by decreases in money supply. Fed jobs is to prevent deflation

 

There was a word in the sentence I posted. It was "may", as in something that might happen. Since I wasn't discussing Fed actions, my assertion still stands. Given a fixed money supply or lack of meddling by central planners, deflation can occur due to increases in productivity. The opposite, however, is not inflation because inflation is always a matter of money supply.

 

It's doing a terrible job when it comes to computers and mobile phones.

 

No...it's not to clear inventory...it's to have cash flow and profits.

Deflation is actually negative inflation and as you say may occur for different reasons, one being money, another being credit, but as I keep posting here if the consumer slows/stops spending, in which demand is much less than supply...prices go down.

I also challenge your idea of 'increased productivity' because a company paying attention to the marketplace should be quite wise about production and inventory, etc.

 

I'm unclear what you mean by slows/stops spending. Do you mean on particular goods or on every good. It seems unlikely that someone would simultaneously reduce their spending on rent, gas, food, entertainment, all at the same time and by the same percentage.

Also remember that all prices are relative. A case of beer costs 10 loaves of bread. A car costs X cases of beer. Money is simply a means to put a number on these relative exchange values. Bread costs $3 per loaf and beer costs $30 per case.

Now the only way for every price to rise/fall yet maintain the same relative exchange price among all the goods is for the price of money to change. When the price of money changes, even though the relative exchange values of all goods remains the same, their exchange value relative to money changes.

This is why inflation/deflation is an exclusively monetary phenomenon. Inflation is impossible with regard to exchange ratios, because as one goes up, the other goes down. They are inverse. Only when the price of money changes can ALL prices move in concert.

 

actually deflation has to do with the general price level not the price level of computers and phones. Do you understand?

 

true enough but who cares given that every nation has a fed to prevent deflation

 

inflation and deflation both happen when the Fed prints too much or too little. as productivity naturally increases they need to lower money supply to avoid deflation but as population and GDP rise they need to increase money supply to avoid deflation too so the Fed is always involved in deflation, and inflation Your mistake is assuming a neutral fed which makes no sense and does not exist.

 

you mean if there is no fed to prevent it which of course is absurd

 

incorrect, when money supply and velocity expand relative to available goods and serviced.

 

I make no such assumption. You're mistake is obsessively arguing against a strawman.

Why would a Fed be "neutral" (whatever that means?) The whole purpose of a central bank is to allow politicians to spend vast sums without bankrupting the nation too quickly.

 

Also incorrect. Inflation is a general increase in prices in an economy and consequent fall in the purchasing value of money. It's also sustained. A one time increase in money supply isn't inflation.

 

Prices can't change across the board for all goods (general price) unless due to a change in the price of money. Otherwise, there would simply be relative price changes.

 

so??????????What is your subject???