Most people don’t think about inflation and the money supply, but they are things that are important. It has come out in the news recently, because Congress is discussing raising the debt ceiling again, and that is an important factor in determining the value of the dollar. The dollar is backed by debt, Treasury Bonds to be specific. As long as there is a market for Treasury bonds, the dollar will be worth something, but the quantity theory of currency applies. That means that the more money that ...
I don’t often have much conversation with clerks in stores, but yesterday evening, the check out clerk in a CVS apologized for the inflation. I briefly explained that it wasn’t his fault, that it is due to policy for the Federal Reserve and the Treasury Department. He then said that CVS sometimes raises prices in anticipation of price hikes. We spent a while trying to get each other to change his mind. He had a set of facts, and I know the underlying reasons, so neither of us changed ...
I saw a letter to the Editor in the Daily Hampshire Gazette that asserted that present inflation was a result of Biden’s policies. That is a false accusation. There has been inflation at substantial levels for several decades, and it has been a deliberate policy of the U.S. government. The inflation policy was established to ensure that the government could make money by selling long term bonds. Bonds are sold by the Treasury Department with a fixed interest payment, and the actual ...
I have noticed a couple of mentions of people trying to get the minimum wage raised to $15 per hour. They are fighting for the wrong thing. What they want are jobs that pay a reasonable amount. Raising the minimum wage that much would just make the dollar lose a lot of value very quickly, so that in a few years the fifteen dollar an hour wage would be worth less that whatever the minimum wage is now. The moves that would achieve their goals more readily would be to eliminate the minimum wage and ...
Updated 04-25-2017 at 07:50 AM by PeterL
First income distribution, then wage inflation, and now measuring inflation. Inflation: Noun Economics. a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency (http://dictionary.reference.com/browse/inflation?s=t) In my last post I showed examples of two types of inflation, wage inflation and Consumer Price inflation, but there are several other kinds of inflation, including the ...
Updated 12-01-2013 at 05:32 PM by PeterL