What's the point of inflation?

[HabitualChiller]

This is patently false. History shows, during times of inflation, that corporate profits increase right along with executive salaries. And this isn't because of inflation; rather, it's because profits are still being raked in. The only class of people who don't benefit during inflation are the middle class and working poor, whose wages stagnate while the price of goods rises. If there were caps of executive salaries during "inflationary" periods, including a freeze on stock purchases and bonuses, wages of workers could rise and an equilibrium between that and cost of living would be met.

Dapped for the exquisite punctuation.

shyt is rare to see

 

[HabitualChiller]

@BrothaZay you got range breh

If anything, I gotta give him that. Homie is actually a great thread-starter.

 

[invalid]

That comes into it too. The more money/disposable income people have, the more likely they are to spend. So if the costs of products don’t go up with wages, then naturally there would be more demand than supply... but as we know, there are other external factors that can affect supply/demand:

Exchange rate.
Season/Weather.
Unemployment.

I'm confused. There's different types of inflation.

Is @BrothaZay referring to the inflation of the dollar which causes the general increase in all products over time regardless of supply and demand or inflation in prices that's a function of supply and demand?

It would seem to me that an increase in wage has no effect on the demand for a product such as milk. The demand for milk wound seem constant over the years and possibly even declining today. So I don't see the correlation of wage dictating price.

 

[ThrobbingHood]

I'm confused. There's different types of inflation.

Is @BrothaZay referring to the inflation of the dollar which causes the general increase in all products over time regardless of supply and demand or inflation in prices that's a function of supply and demand?

Interest rate means the cost of borrowing. Inflation means the cost of products. The op is referring to the latter. Both of which can contribute to the exchange rate (the value of a currency).

 

[invalid]

Interest rate means the cost of borrowing. Inflation means the cost of products. The op is referring to the latter. Both of which can contribute to the exchange rate (the value of a currency).

Sorry, I told you I didn't pay attention in Economics, bear with me.

I thought wage moved a posteriori to price? Price increase, wage keeps up?

Increase in wage does not necessarily mean increase in demand for a product.

Your carrot example said that it doesn't make sense that the cost of a carrot stays at $30 as people's wage increase. The assumption you're making is that wage increase leads to higher demand of carrot which leads to higher price.

But can we really say that increase in wage leads to a higher demand?

Could it be the increase of the price of carrot or any product in general causes demand to rise which causes wages to "in theory" keep up with that demand?

Price increase being a result of cost of production, cost of materials, etc.

Otherwise, people wouldn't be complaining about "stagnant wages" not keeping up with the cost of goods/cost of living.

 

[chineebai]

This is patently false. History shows, during times of inflation, that corporate profits increase right along with executive salaries. And this isn't because of inflation; rather, it's because profits are still being raked in. The only class of people who don't benefit during inflation are the middle class and working poor, whose wages stagnate while the price of goods rises. If there were caps of executive salaries during "inflationary" periods, including a freeze on stock purchases and bonuses, wages of workers could rise and an equilibrium between that and cost of living would be met.

I said the same thing lol

 

[Mowgli]

Inflation is when you print more money and then you have something to back it with. Basically printing money out of thin air. Why? To control the value of the money and prices.

Typically you would have something like gold silver natural resources backing the money to give it some type of value. This is what balances everything.

In times of inflation prices go up because the value of the money has gone down. essentially there's just a ton of fake ass money in the system which allows Banks to manipulate prices by devaluing the money.

Gold and silver backs dollars not paper

 

[Strapped]

@BrothaZay

Bad government

 

[Strapped]