Topic: Inflation and Deflation of Price and Money Supply - page 2. (Read 1262815 times)

It is possible to address inflation issue and bring it down by money tightening policy. This is what FED is doing and recent data of CPI reflects that this policy is working as CPI is on decline and may decline further as crude prices are also falling which might help to stop further increase in interest rate . The best hedge against inflation is Bitcoin which can not be printed more than 21 Million.

My take on inflation currently is its a constant ongoing force with varied time frames.   We can have retractions short term in a counter trend but the overall effect is continually towards the benefit of government debt.   Deflation will raise the cost of servicing debt, the FED has a large fear of that feedback effect but both sides of the spectrum are destructive to GDP.   Inflation we rise nominally but we arent gaining anything.


Its not quite true, people can and do setup their own businesses and experience exceptional growth.   The fastest growth in almost any country comes from the smallest entities not the largest global mega corps despite their advantages from economies of scale the country as a whole requires the smallest participants to be able to do well.

When government is passing in yet more red tape they do usually have the good sense to exclude the very smallest of business from the constant drag of government, I think its usually maybe 50 or less employees are spared requirements.   That can create a problem later but at least that company is likely able to stand before being weighed down further.    In some countries I've heard its very common to run a (startup) business from a car in order to constantly travel and evade the crushing force of government upon any private enterprise.  People might assume that means they are not legal but the business Im referring to is just normal trade in household goods yet its opposed by the giant size of government unfortunately.

Exactly, if you are like the majority of people, you don't own assets that produce enough passive income to sustain your lifestyle. Thus, the only options you have left is to either put in more hours --> get a second job/side-hustle or upskill yourself to secure a better paid position be it at the same workplace or in another company.

Like Buffett said - in a inflationary environment "The best thing you can do is to be exceptionally good at something."
Of course we can't just say hocus-pocus and we become the best in the field, but you can always start working to attain that.

Time and again people keep on complaining about inflation. But with every passing day the prices will increase. There is no end to it.
The only solution is to earn more money - work a little more harder and do a side hustle too. EArn More  Earn More  Earn More. This is only solution.

Economics is a very young field and sometimes are even self fulfilling prophecy. Even keysian economics used to be all about taxation and less on supply.

Always be wary of Austrian economists, because they are priori thinking based, while Keysians and Monetarists etc are far more scientific and data driven with math models.
The latter can be broken down and analyzed, the former is basically theories. That also makes Austrian theories easier to sell, but they have been extremely poor at predicting any recession for example.
Some part of The Austrian Theory of the Business Cycle are pretty easy to disagree with too, they said business can handle fluctuations but not gov induced credit expansion, which is simply wrong because everyone made decision based on prediction of future rate. If anything, it is even more predictable. Government policy is largely very predictable, even more so than volatility of gold supply.

At the end, central banks are focused on factors outside money. The economic growth, employment rate and inflation. i.e. the well functioning of the society (in economic terms)
Inflation will always be here to stay, but it isn't difficult to build wealth because of this.

Unfortunately there is no chance to avoid inflation and we all need to think about a) what swe should use as an inflation hedge to protect our savings b) how to live with inflation.

That is well stated - I liked how you have made a combination of Inflationary - deflation. Although inflations plaguing the entire world.
Everyone is in serious trouble in particular the people of underdeveloped country. The after affect of COVID are now obvious - may this crisis end soon we all see yet  a progressive economy. Amen

So fascinating to read economic talk in these forums.  Beautiful to see the bitcoin economy grow. Very interesting that those skeptical about bitcoins economics back in the day are the very same arguments we hear today.  Keynesian thinking BTC

I think the best way  to address Inflation is to reduce money supply and FED has already taken a strong step in this direction by increasing interest rate by 0.25% but is negative for stock market and economic growth. The second reason is sky rocking price of crude oil which has increased inflation all over the world, i am quite sure it will come down if Ukraine issue is resolved and a Nuclear deal is signed between USA and Iran that  will quickly bring down the crude oil price.

is there any reason to try to delay the inflation driven recession? are not all measures just postponing and later on amplifying the inevitable recession?

The two concepts are wroth studying extensively because it determines our success in labour market. No one prays for deflation but it is inevitable so all we need to do is to be vigilant and study the labour market, then will be go home smiling all the way.

We are in inflationary-deflation due to many factors.  Inflation primarily from money printing and low rates.  Deflation due to lock-downs and problems caused by the virus.  The only thing missing is velocity of money.  Once velocity spikes, its game over for the USD and probably the current financial system as a whole.

You are absolutely right . This happens because an abundance of money supply leads to an increase in demand for goods and services, while a scarcity of money has the opposite effect and increase in  supply of money is main cause of increase in inflation but this is one side the of story about inflation. Inflation causes increase in demand of goods and services that means escalates economic activity and creates new job opportunities. Deflation in any country means slow down in economic activity. This is the reason Governments in office try to keep inflation low but never like deflation to happen in economy  as it it increases unemployment and reduces their popularity. This is why I think inflation is bad but unemployment is worse.


https://www.bing.com/search?q=his%20is%20mainly%20because%20an%20abundance%20of%20money%20leads%20to%20an%20increase%20in%20demand%20for%20goods%20and%20services%2C%20while%20a%20scarcity%20of%20money%20has%20the%20opposite%20effect.&form=IPRV10

Hi!      http://adfoc.us/72448882069993
Sorry for posting in English. My Swedish works fine for reading, so feel free to comment in Swedish Smiley.
I was wondering if someone can give me some more detailed insights in how mining is taxed in Sweden from a private or company perspective.
I understood so far that small scale mining is seen as "inkomster från hobbyverksamhet" similar to selling honey etc.
I have some questions that I did not completely understand.

Is is possible to measure the electricity the miner uses and deduct that from the revenue?
Do I calculate the tax when I receive the mining reward or when I sell it?
Does the tax depend on the tax of my regular income (30%/50% etc)?

Is there any advantage of creating a company (enskild or aktiebolag) do run the activities?

Thank you for reading Smiley

Well, all depends upon what goes trading. These ups and downs are directly related to what people observe and what they make their mindsets against them. Yes, I do agree on the term of Demand and supply but here in digital currency trading, the scenario gets changed.
There was a time when the people weren't sure and had no trust in bitcoin but as you can see the current exchange rate of bitcoin it's way too high. As it depends on the market trend and purchasers' views about the goods.

I’m sharing this file in the topic. I am starting to notice that my fellow plebs in the forum are taking a fascination in the topic of inflation, and hyperinflation.

Everyone should read this, https://recision.files.wordpress.com/2010/12/jens-parsson-dying-of-money-24.pdf

The Central Bank of every nation-state needs a Volker.

I think the investment of USD into the crypto market is the only thing keeping inflation from spinning out of control.  However, the fiat money that is "invested" into the crypto markets is centralized into a handful of exchanges that have no real utility except as a "virtualized store of wealth"  Crypto has no real-world use.  None of these projects have solved any of the real world problems that fiat created.  It's all just speculation in relation to fiat.  With that being said, if the "price" of crypto in relation to fiat moves significantly enough in either direction in a relatively short timespan, alot of '"investors" will withdraw their fiat into the real world.  This brings fiat back into the economy and then the real inflation will set in.  If it is done so on a large enough scale that is a recipe for hyperinflation.  

Not really.

It is only good in a speculator's sense along with Beanie Babies and rare Pokemon Cards, not in a 'useful for exchange of goods and services' sense.

As a currency, there are more things to consider than how much inflation it gets like being useful for buying goods and services.

BTC is and has been abiding well, paper dollars on the other hand? Not so good.

Can't, I don't have enough merit for images.

Still, the fact that people are talking in fiat doesn't exactly bode well for Bitcoin.