Inflation and Deflation of Price and Money Supply - page 54.

Erdogan

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Quote from: painlord2k on July 24, 2014, 01:04:03 PM

What is happening in Argentina is a movement from inflation to hyperinflation.
People now believe inflation is ingrained in the currency and it is a continuous policy of the government, so they are freeing themselves from Argentinian Pesos whatever be the actual currency supply expansion.

Specific good/service prices increase can not be foretell from currency inflation because the Central Bank and the government can not control or foresee exactly where the new money will flow after they give it away.

Exactly, that is how the hyperinflation is ignited, when everyone tries to get rid of the coins as fast as possible.

painlord2k

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What is happening in Argentina is a movement from inflation to hyperinflation.
People now believe inflation is ingrained in the currency and it is a continuous policy of the government, so they are freeing themselves from Argentinian Pesos whatever be the actual currency supply expansion.

Specific good/service prices increase can not be foretell from currency inflation because the Central Bank and the government can not control or foresee exactly where the new money will flow after they give it away.

Erdogan

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Here is a description of the Argentina situation that shows that the inflation in prices is not directly computable from the inflation in money supply:

"Second, simple money-supply expansion to fund public expenses is a well-known alternative, and Mercedes Marcó del Pont, when in charge of the Central Bank, did use this tool to finance government. However, this ploy expanded the monetary base at a rapid clip, with a peak in February of last year. The annual expansion of almost 40 percent and its inflationary implications became too great. Monetary expansion has continued, but at a slower rate.

At present, the expansion hovers around an annual 20 percent. Despite the lessened monetary expansion, however, inflation remains high, and is vulnerable to decreased demand for the Argentinean peso. So this too limits the room for funding through what is known locally known as la maquinita — the little inorganic printing machine. Any surge in monetary expansion would cause inflation to surge beyond the current level, which is approximately 40 percent."

From (the recommended) Panam Post:

http://panampost.com/ivan-cachanosky/2014/07/24/argentina-central-bank-on-path-to-insolvency-in-just-two-months/

eboard10

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Guys, I found a great article that clearly explains the relationship between money supply and demand for liquidity and how that affects asset prices. He basically shows how QE hasn't had much of an effect on inflation so far due to the low demand for credit since banks weren't willing to lend to anyone. He also proposes the idea that the current change in market sentiment coupled with excess liquidity in the market will lead to stock price inflation over the next year or two.

http://seekingalpha.com/article/2309905-qe-to-propel-market-treacherously-higher-after-taper-ends

bezekal

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interesting!

alain77

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buy4crypto

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freecrypto.top

One thing that has not been accounted for in the OP is advancement in tech and services.

If a coin has x value due to its supply / demand. I guess the tech and services are just a general supply concern.

The more advances in technology, the more demand.

DannyElfman

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Quote from: thefiniteidea on February 12, 2013, 09:34:30 AM

Since we're both very excited about this, and to restrain our words from moving too far from the point, I think we should address one issue at a time.

I will start with a definition of inflation that I agree with:

in·fla·tion
Noun

The action of inflating something or the condition of being inflated (This is the definition not related to economics)
A general increase in prices and fall in the purchasing value of money (This definition is related to economics)

My interpretation from the above definition related to economics:

1. Price Inflation refers to the "general increase in prices" part of that definition
2. Money Supply Inflation refers to the "fall in the purchasing value of money" part of that definition

Therefore, I can not agree that inflation "means the same thing as increase", as it conflicts with the "fall in the purchasing value of money" part of that definition.

Note: this is not an argument of what the "general increase in prices" or "fall in the purchasing value of money" means. We can get to that once your interpretation of the word inflation is understood.

1 and 2 are really just two different ways of looking at it. When prices generally rise the $100 that you have in your wallet can now buy less goods.

Djo

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quote :
I think we’ve already seen what we’ve needed to see, now it just comes down to timing. The primary [goal] would be to get it up globally for our hotels.

ZephramC

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Quote from: allsopfree on July 02, 2014, 03:12:58 PM

My mom keeps saying that inflation killed yougoslavia

Might be one of the reasons.
Number 19 get in line ... http://www.munknee.com/21-countries-have-experienced-hyperinflation-in-last-25-years-is-the-u-s-next/ ... to be continued.

allsopfree

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My mom keeps saying that inflation killed yougoslavia

painlord2k

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I made new, improved, more detailed, charts of Bitcoin vs USD inflation.
Instead of a point every month I plotted a weekly chart (found a CSV for M1 and took the daily BTC numbers from Blockchain.info CSV)
Interesting we can find easily the daily stock of BTC but can find only a weekly M1 for USD.

This is the link to the spreadsheet:
https://docs.google.com/spreadsheets/d/17Jjhd_nnfRJ9EyYuOM1ACPMwRod3hhPqRk4YQp7FIZE/pubhtml#

The formula are:

E4=(B4-B3)/B3
F4=(C4-C3)/C3
G4=F4-E4
N4=(C4-C3)*52/C3

Of interest, is tab 2013; it show the Annual Bitcoin Inflation (red), diff with USD M1 Inflation (blue) BTC Weekly trend (Yellow), M1 Inflation (green).

When I made the old chart I had the data just for february. It shown a big spike in M1 USD inflation but I didn't mind of it because I believed it was an aberration of monthly data.
Now, doing it with weekly up to June data, the spike in M1 inflation is confirmed. The Fed could be tapering the QE, but it is printing like hell.

The Red and Green lines are about to cross.
When it happen, the M1 will inflate faster than BTC stock and people saving in USD will be bleeding compared to BTC even if there is no increased adoption of BTC.
I had think we would not be there before the next halving. But I didn't considered the Yellen factor (the increase of M1 inflation start after Bernanke step down).

Jamie_Boulder

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TBH it could go either way, everything is uncertain until we hit that next difficulty bracket in (2017?)

Of course considering my financial investment in the currency (and increasing use of it) I will admit that it's of my personal opinion that in the long run we will only move forward.

deisik

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English ⬄ Russian Translation Services

Quote from: BitcoinLlama on June 24, 2014, 02:57:07 PM

Keep in mind longterm trends. It is possible for BTC to be hoarded for the first hundred years then behavior to change thereafter.

To seriously take into account the first hundred years of Bitcoin life, you should also consider many more events that are not so longterm but nevertheless could substantially change or even put an end to it... Cool

BitcoinLlama

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Keep in mind longterm trends. It is possible for BTC to be hoarded for the first hundred years then behavior to change thereafter.

woogie

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Quote from: benzone on May 08, 2014, 05:47:01 PM

Quote from: ZephramC on April 23, 2014, 10:30:33 AM

Quote from: deisik on April 22, 2014, 01:44:26 PM

Quote from: zolace on April 22, 2014, 12:38:46 PM

Inflation is the general increase in prices, so it is the goods that you buy whose price will inflate, rather than the currency used to buy the goods.

Some people want to be different and say that inflation is an increase in money supply (monetary base before all). It may or may not influence the prices... Cool

Those are two possible definition of inflation. Monetary inflation and price inflation.

On this forum, yes. Anywhere else (any economics literature...), no. This is like telling a physicist there are two kinds of temperature, one based on molecule vibration and the other based on things being hot.

Hahahahaha.. i very much enjoy the comparation.

nwfella

legendary

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Well hello there!

Quote from: Ashbite on June 13, 2014, 09:25:35 AM

it is very simple why bitcoin doesnt take off.
There is constantly new hardware, companys run this hardware and instant dump their coins.
This will come to an end eventually.

Don't think miners insta-dumping their freshly generated coins amounts to very much. Karpeles could drop 3600 coins while dropping a duece and not sweat it. Plenty of wanna be karpeles's out with with ill-gotten coins.

boumalo

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Quote from: Ashbite on June 13, 2014, 09:25:35 AM

it is very simple why bitcoin doesnt take off.
There is constantly new hardware, companys run this hardware and instant dump their coins.
This will come to an end eventually.

The mining reward will go down over time and adoption will grow; Bitcoin took off but it just started; Bitcoin will seem great compared to inflated currencies fixed by governments that create wars and economic turmoil

Ashbite

full member

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it is very simple why bitcoin doesnt take off.
There is constantly new hardware, companys run this hardware and instant dump their coins.
This will come to an end eventually.

boumalo

legendary

Activity: 1918

Merit: 1018

Quote from: immeraba on June 06, 2014, 08:21:34 AM

Doesnt the fact the BTC is limited in coins make inflation impossible?

Bitcoin is inflationary in the sense that the amount of bitcoins are going up everyday until we reached 21millions

The amount of users and the world wealth will likely increase enough for the price of Bitcoin to rise in today's USD and it will rise even more in USD since the FED is creating USD like there is no tomorrow

Topic: Inflation and Deflation of Price and Money Supply - page 54. (Read 1456420 times)