Topic: The Devaluation of fiat money is powered by Inflation - page 2. (Read 389 times)

I think that only those people whose income is ahead of expenses can buy goods at higher prices. And if we look at a person with a fixed income and who before inflation did not have enough earnings for all needs, then after rising prices, he will have to fall in love with cheap rice instead of expensive potatoes, or change his country of residence. But in the new country, he will have more expenses for housing and medicine.

I think that only those people whose income is ahead of expenses can buy goods at higher prices. And if we look at a person with a fixed income and who before inflation did not have enough earnings for all needs, then after rising prices, he will have to fall in love with cheap rice instead of expensive potatoes, or change his country of residence. But in the new country, he will have more expenses for housing and medicine.

Inflation does not around only about the prices of the commodities, its actually based in a whole market sentiment of one country, the monetary policies also a big contributor for the inflation. Yes there’s an alternative but considering the generations now, we are still buying the things that we want even if its too expensive or even if there’s a cheaper alternative, and that’s how many deal with the inflation.

Inflation is one of the economic terms that is often misunderstood. In a good economic system, controlled inflation is necessary to create value on the commodity and to force consumers to spend instead of displacing. As an example of the importance of inflation (in its simple sense, which means an increase in product prices), we can ask why prices do not increase in Japan^[1] and how It was bad for the economy^[2].

From the article, I have a few questions. 
If the cost of a product is $20 for example, there is no way that product can be sold for $15 just because that's the price that the people will buy. No company would operate like that. A company would food eventually if they followed this business model. The goal is to make a profit, so if they're not making a profit then there's no point in the business.
Or, they're making a profit but not much. For example, they make just $2 out of a $20 product. Isn't that a good thing that a company can't exploit people and make excessive profits off of them?

Does it mean that the forces of demand and supply don't play a role in the determination of prices in Japan? From the article, I can conclude that it is the people who determine the price, so no matter how the market is, the buyers still determine the price.

The devaluation of currency can be caused by inflation.
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Gold always shows higher price

According to my experience gold never disappointed its holders and its true that for sometime it downs but when we compare its price on annual basis so we can conclude that gold is always better in price than previous year.

Gold doesnt go up in value, it has no yield either so it should not be kept for profit especially.  The biggest point is stability in that its inert and able to exist outside of these FIAT paper problems, also most of the world will accept gold so its a link to international trade.  People like to compare crypto with gold, they are different but its understandable due to similar advantages.

So i think this should be thrown into the house for better enlightenment and better discussion.

Another question,
Does it mean that the forces of demand and supply don't play a role in the determination of prices in Japan? From the article, I can conclude that it is the people who determine the price, so no matter how the market is, the buyers still determine the price.

so anyone understands that with rising inflation comes devaluation. but if you look at the example of agriculture, when the country has a poor potato harvest but a good rice harvest, should inflation occur?
Won't the poor stop buying expensive potatoes? It is logical that they will buy cheaper rice and there will be no inflation.

Devaluation of fiat currency is not only caused by inflation, there are many more factors that must be considered which have contributed in many ways to how we are being affected by inflation in holding a fiat currency in an economy, have we considered some of the policies that surround the monetary system in fiat, how the government officials control the process, how it's been manipulated or maybe we ever think of the kaw behind the repeatition in continuous printing of fiat currency without limit, i see this as a broad discussion with how to tackle the overall causes of fiat devaluation over time while inflation is just the most emphatic cause we all mentioned often leaving others causes or factors behind.

gold has been proven to maintain asset values for hundreds of years, its value has remained even increased.

Fiat money is a money or currency that is unable to change its function or pattern,which is signed and decreed as a legal tender.having this money is like owning an asset because you cant change it,but it can be use as an exchange for something.

This fiat money is a meduim of exchange in the form of coins,paper and all of that.since its existence it has been an easy way of exchange for demands and wants and has helped in reaching to the goals of oneself.which have made the approach and desires for this fiat money to be over emphasised.
But the insurgency of inflation have empowered the devaluation of this money.

Inflation is the general increase or rise in the prices of goods and services,when inflation is encountered it cause a total increase and alters the prices of goods and thus amount to the devaluation of fiat money.

What Causes inflation: For example when the demand for a particular products is higher than the supply,that way inflation has taken place.
                                          Another one is when prices goes up and affect everything including supply. And dont meet  up to a persons or country needs and wants.that way inflation has ocurred.
                                          Then Devaluation: The main power engine for inflation of this fiat money.This happens when a particular country is trying to adjust to the tendency of balancing the fiat money with trade(Goods and services).when this is done money or currencies value is reduced and make importation of goods to be downgraded and the exportation of goods and services to be reduced.
The devaluation of this money has made exports to increase and importations to decrease, because since the money is devalued as inflation arised,the neccessity of meeting to that demand is reduced,and so encouraging the exportation of these goods would help in keeping It at a balance.

So i think this should be thrown into the house for better enlightenment and better discussion.