Topic: Inflation and Deflation of Price and Money Supply - page 10. (Read 1424248 times)
According to Keynesian economists, inflation comes in two varieties: demand-pull and cost-push. Demand-pull inflation occurs when consumers demand goods, possibly because of a larger money supply, at a rate faster than production. Cost-push inflation occurs when the input prices for goods tend to rise, possibly because of a larger money supply, at a rate faster than consumer preferences change.
Keynesian and other non-monetarist economists reject orthodox interpretations of the quantity theory. Their definitions of inflation focus more on actual price increases, with or without money supply considerations.
Infrastructure for bitcoin generated from mining and we need a device that is not cheap. maybe in future after bitcoin can't be mining, the miner will mining other altcoin and payout in bitcoin like a multipool.
Bitcoin is an asset that has limited supply, witch make it more expensive over time, meaning, over adoption. People need to remember that Bitcoin came to substitute money as we seen today. Governments and Banks have been creating money from thin air since World War One when they created fiat money, since then inflation is taken wealth from people as the value of the paper is reduced by new printed money, as colateral as that we have debt increase which take wealth from futures generations to be expended nowadays. As more fiat currencies fail around the world more people will realise what is real money and they will come for Bitcoin as store of value beacuse of it intrisic value, scarcity.
I really think at this current rate bitcoin is producing over capacity output which also makes the demand for it lower. I think the value of it will start to slowly depreciate
Oh, to have been involved in Bitcoin back when having 10-20 BTC didn't put you in the top 1% already!
Great explanation of inflation and deflation, shame I am five years late!
Great explanation of inflation and deflation, shame I am five years late!
This naturally happens in the buainesa worl.In good times or in bad times, you need to be adaptive and flexible.You have to be ready in inflation and deflatio of price and money supply.
Bitcoin is a great way to invest, because there are limited amount of it. There is no inflation, conversely, the price goes up.
If I'm an intermediate and all values of the apple are static, then of course I get part of the value creation.
But you can also see this differently.
Suppose that yesterday, I really wanted to possess an apple. I bought an apple for 6 eggs, and I valued it 10 eggs. So I had a value creation of 4 eggs for that.
However, today I realize that I don't like having an apple any more. I value the apple today only 2 eggs. I now sell that apple to you for 6 eggs. I have AGAIN a value creation today of 4 eggs by this act.
If you have valued an apple all the time 8 eggs, then you could have bought it directly yesterday for 6 eggs (market price) and gained 2 eggs of value. When you buy the apple from me you also pay 6 eggs, and you gain 2 eggs of value.
So if you directly buy the apple, you win 2 eggs and I, nothing. "total gain 2 eggs"
If I buy the apple, and then sell it to you, I win 4 eggs yesterday, 4 eggs today, and you win 2 eggs in value. "total gain 10 eggs".
You can say: yes, but your change in mood made you LOOSE 8 eggs. No. Value is only instantaneously and subjective. I cannot compare value to me yesterday, with value to me today. I can only say, at each instant, what I value and what I don't value.
Appreciation changes. Subjective value changes.
But you can also see this differently.
Suppose that yesterday, I really wanted to possess an apple. I bought an apple for 6 eggs, and I valued it 10 eggs. So I had a value creation of 4 eggs for that.
However, today I realize that I don't like having an apple any more. I value the apple today only 2 eggs. I now sell that apple to you for 6 eggs. I have AGAIN a value creation today of 4 eggs by this act.
If you have valued an apple all the time 8 eggs, then you could have bought it directly yesterday for 6 eggs (market price) and gained 2 eggs of value. When you buy the apple from me you also pay 6 eggs, and you gain 2 eggs of value.
So if you directly buy the apple, you win 2 eggs and I, nothing. "total gain 2 eggs"
If I buy the apple, and then sell it to you, I win 4 eggs yesterday, 4 eggs today, and you win 2 eggs in value. "total gain 10 eggs".
You can say: yes, but your change in mood made you LOOSE 8 eggs. No. Value is only instantaneously and subjective. I cannot compare value to me yesterday, with value to me today. I can only say, at each instant, what I value and what I don't value.
Appreciation changes. Subjective value changes.
Economic down because centralized system, now time for crypto to fix that mistake, crypto is the future...
I think that there will be a natural growth of bitcoin and highly dependent currencies. The price is formed as demand for it - the demand can depend on the news around the crypto currency. This has already been-positive news (for example, the adoption by some country of the law on the legalization of crypto-currency transactions) and negative (ban on trade, etc.) are heading the course.
the information you provide is very good, and the explanation is easy to understand, and very useful for determining or predicting price movements in the market, especially for beginners like me who learn to trade cypto currency
eventually the bank is merely to comply with its mean reserve requirement. It just must own the 900$ when somebody else pays the check, if it isn’t at the same banks.
I'm enjoying the different points of view that have already shared in this threads , will help discussion very rich with vital information . Just like most field of endeavor is bound to different school's of thought all of which help to advance the course of knowledge . Being student economics, I'm just want to know how it works the concept of this inflation and deflation in practical terms that help to improve the economy of nations and don't limit ourselves to definition and Symantec terms
Relatively, the value of the Bitcoin and the price of the products and/or services are inversely proportional to each other; resulting to price inflation or price deflation. Price inflation simply means that everytime the value of Bitcoin decreases, the price of the products and/or services increases. On the other hand, what happens in price deflation is the opposite of what happens to price inflation. Price deflation means that if the value of Bitcoin increases, the price of products and/or services definitely decreases. All of these price inflation and deflation varies upon the value of Bitcoin. Therefore, the rate of change of the price depends on the value of Bitcoin. However, this rate of change in the price is not only limited alone on how the value of the Bitcoin varies as there are other factors that is considered to be the cause of such change.
Inflation is caused when goods and services are in high demand, creating a drop in availability. Supplies can decrease for many reasons: A natural disaster can wipe out a food crop; a housing boom can exhaust building supplies, etc.
Deflation occurs when too many goods are available or when there is not enough money circulating to purchase those goods. For instance, if a particular type of car becomes highly popular, other manufacturers start to make a similar vehicle to compete.
Price depends on the demand of the product for example if the people really need that product the price may increase.
Money supply depends only on the customers of the products in that specific market.
Deflation occurs when too many goods are available or when there is not enough money circulating to purchase those goods. For instance, if a particular type of car becomes highly popular, other manufacturers start to make a similar vehicle to compete.
Price depends on the demand of the product for example if the people really need that product the price may increase.
Money supply depends only on the customers of the products in that specific market.
You all may be very interested in my new Federal Reserve of WIP coin, which is centralized and by fiat. There is a discussion thread in here as well. 
Inflation and deflation have negative social and economic consequences, so the States are actively fighting these processes.
The method of "expensive money"is used to fight inflation. Monetary authorities are directing their efforts to reduce the volume of money supply. Against inflation is applied the increase in taxes, reduction in lending, reduction of government spending and increase in sales of government securities.
To combat deflation, reverse measures are taken.
The method of "expensive money"is used to fight inflation. Monetary authorities are directing their efforts to reduce the volume of money supply. Against inflation is applied the increase in taxes, reduction in lending, reduction of government spending and increase in sales of government securities.
To combat deflation, reverse measures are taken.
do not forget to include external factors such as the benchmark interest rate from the Fed which also affects the monetary policy of a country must reduce or increase the amount of money in circulation
Inflation and deflation have negative social and economic consequences, so the States are actively fighting these processes.
The method of "expensive money"is used to fight inflation. Monetary authorities are directing their efforts to reduce the volume of money supply. Against inflation is applied the increase in taxes, reduction in lending, reduction of government spending and increase in sales of government securities.
To combat deflation, reverse measures are taken.
The method of "expensive money"is used to fight inflation. Monetary authorities are directing their efforts to reduce the volume of money supply. Against inflation is applied the increase in taxes, reduction in lending, reduction of government spending and increase in sales of government securities.
To combat deflation, reverse measures are taken.
Inflation is better if:
you have outstanding loans or other significant debts – they will be impaired.
You need a loan - if public loans are available for banks, they will also be more accessible, interest rates on such loans will fall in relation to the increase in prices.
Deflation is better if:
You do not have debts on loans or other unpaid loans – if deflated, the salary will also decrease, but the payments to the Bank will remain at the same level.
you have savings in the national currency – their real value is growing.
you have outstanding loans or other significant debts – they will be impaired.
You need a loan - if public loans are available for banks, they will also be more accessible, interest rates on such loans will fall in relation to the increase in prices.
Deflation is better if:
You do not have debts on loans or other unpaid loans – if deflated, the salary will also decrease, but the payments to the Bank will remain at the same level.
you have savings in the national currency – their real value is growing.
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