450
How come we experience so much more inflation than deflation? in other words, why does our buying power decrease far more often than it increases?
(lemmy.dbzer0.com)
this post was submitted on 22 Jul 2023
450 points (96.7% liked)
Asklemmy
43874 readers
1414 users here now
A loosely moderated place to ask open-ended questions
Search asklemmy ๐
If your post meets the following criteria, it's welcome here!
- Open-ended question
- Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
- Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
- Not ad nauseam inducing: please make sure it is a question that would be new to most members
- An actual topic of discussion
Looking for support?
Looking for a community?
- Lemmyverse: community search
- sub.rehab: maps old subreddits to fediverse options, marks official as such
- [email protected]: a community for finding communities
~Icon~ ~by~ ~@Double_[email protected]~
founded 5 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Debt is what drives inflation. Let's say you got a total of 1k USD in circulation. Now, let's say that some person decides he needs to borrow 100 USD from the bank. The bank gives him the 100 USD, but with intrest. Let's say that that intrest is 10 USD. So, the person gives back the 100 USD plus 10 USD intrest. But, there's a problem. If a total of 1k USD is in circulation, where do the 10 USD come from. It can't come from thin air, so it has to be printed. Thus, now you have 1.01k USD in circulation which inflates the prices of things.
There are other reasons as well. This is all well explained in Zeitgeist. I suggest you take a look at the documentaries.
Eh, I think you need to rethink this, as this is nonsense. Maybe you forgot some steps?
Why is it nonsence? It makes perfect sense to me ๐คท. Granted I may not remember everything correctly and other things that were explained in Zeitgeist, but I think I remeber this correctly.
Because the 10 USD are not created from thin air but taken from the 1000 USD in circulation and transferred to the bank.
But it is true that the bank's ability to conjure up the 100 USD debt even if they don't actually have all of it contributes to inflation, so I guess your source might have gotten it correct, but you clearly misremember the details.
That may be true... I did watch the documentaries a long time ago.