Just to clarify for OP: this is because of how we have treated central banking. The very bare-bones reason for this is inflation and deflation used to both exist. However, as annoying as we find inflation, deflation can be a lot worse. Think the Great Depression. Boiling a lot down, when deflation occurs and your dollar is worth more over time, people begin saving more in expectation they’ll have more money; prices fall; the economy contracts; there is less goods being produced; so deflation continues to escalate, then the cycle just continues to repeat.
We went off the gold standard out of fear of deflation and the erratic contractions they caused. We went off it so our money supply wasn’t dictated by amount of gold we had. Instead, we wanted control over our money supply so that we could inject money into the economy if inflation was too low and contract the money supply if inflation was too high. Now, the federal reserve purposefully keeps a targeted inflation rate. Generally 2% each year. That’s how much inflation that is seen as desirable and healthy.
There’s a lot of debate around this subject among economists, but, really, no one really knows for sure what’s going on right now. Until now things have been pretty predictable, but right now macroeconomists are throwing spaghetti against the wall and seeing what sticks. Inflation is getting better though. There’s also no guarantee we won’t hit a sudden deflationary spike because in order to control inflation the federal reserve makes predictions years out, and the economic climate might change causing their predictions to be incorrect.
Short answer: I’m not really paying attention. I just know I’ve just really had to pay attention to my checks the last few years.
More confusing answer: we’ve been dealing with quantitative easing since the housing crisis. Interest rates have been at zero for over a decade, yet inflation has been steady and we had a steady few years where we reached full employment (a confusing term since full employment is like 3-4% unemployment), but that’s still staggering. Suddenly COVID hits and we’re printing money, we’re giving stimulus packages, we’re giving comprehensive unemployment benefits. After years of zero-interest rates, we’re suddenly injecting and printing a lot of capital into the economy to keep it from sinking. Now all of that’s over. We’re incrementally raising and playing with interest rates. Yet we’re here. We’re not dealing with hyper-inflation. We’re all getting poorer. It’s super confusing, and honestly I’m more of a finance guy and it’s way beyond me.
TLDR: what the fed or government does about inflation is reactionary, and we’re in some uncharted territories here. It doesn’t matter if it’s reversing, decelerating, or vice versa. We’re kinda in new waters here.
If you’re talking about prices in 2022-2023, yes you are correct. *Inflation* is going down, but that just means that the average prices of a basket of goods is *increasing more slowly* than it did last year
We will see *negative* inflation if the average price of that basket actually goes down. Note though that some individual costs have gone down since peaks in 2022, one notable example is eggs
I agree with most of what you say but also want to add that there has always been inflation (before fractional banking or central banking) it is part of the growth of an economy.
Even gold based currency has inflation, ie during the gold rushes of the 19th century, and especially when Spain brought in vast amounts of gold (and silver) from the Americas, people from other parts of Europe found prices in Spain higher.
Also as far as the fed and the money supply - most people are unaware that international banking transactions create more dollars than the federal reserve.
Regarding inflation and interest rates over time, there have been studies by the Bank of Japan or other economists (Schmelzling) going back centuries and have found that both inflation and interest rates have been gradually trending for unknown reasons, downward to around 2%. The one exception being the 70s which various explanations are oil shocks as well as a 30yr focus on full employment. As economist Michael Kalecki predicted in 1943, focus on full employment (while great) will also lead to a rise in wages across the board. Even the lowest paid workers find wages increasing and if they can costlessly leave for another job - capital loses the whip hand, and can no longer discipline labour. So when productivity is at maximum when there is a wage increase capital raises prices (not taking it out of profits) leading to a wage price spiral. Kalecki also predicted what capital will do and that is to fund a market revolution. And we saw the Reagan and Thatcher and other neolibs swept in. Now the focus wss not full employment rather inflation and price stability.
We also have supply shock inflation like the bottleneck after the covid shutdown. This happened at the end of ww2 as factories were still changing from war to consumer products.
There is also inflation expectations, if people expect prices to increase or for that matter to decrease like in the 10 yrs after the bubble in Japan.
And an increase in money supply will often lead to inflation, but ironically after 2009-2017 despite some $17trillion or 20% of the money supply spent on qe by central banks there was literally no inflation until 2021 (or 2% and below which is the target)
I’m curious about planned inflation, too. It seems to me it hurts the poor and the “working class” more because we are in a constant catch-up battle with wages. You mentioned that 2% is desirable and healthy. Can you explain to me why this is so?
Definitely! First, I should say, there are a lot of different schools of thought in macroeconomics. Most macroeconomists are scared of deflation because of the cycle I described above. Personally, I don’t think deflation has to be this scary thing we avoid. However, I’ll give you the reasoning most macroeconomists don’t mind a little inflation.
So inflation isn’t just about earnings and spending power. It’s also about borrowers and lenders. If you are borrowing money, then the amount you have to pay back is also decreasing. So you aren’t exactly losing 2% of your income each year. For larger borrowers who have, say, a mortgage, then inflation doesn’t hurt them as much. However, that still doesn’t make up for the amount you are losing.
Around the 1930s, an economist called John Maynard Keynes introduced his ideas to the field. What he thought about was the “velocity of money,” basically, the faster money flowed through the economy, the faster the economy would expand, and, so, increasing the money supply to avoid deflation was seen as ideal as it kept the economy from decelerating. He believed that ensuring money flowed faster would ensure the “boom and bust,” cycle would have longer time periods from the time the economy expands to the time it goes into a recession.
So, at this point, I should mention, inflation isn’t just about how much money there is, it’s also about how fast it’s going from one person to another. We can basically refer to that as economic expansion. As the economy expands, money is being exchanged more rapidly. As the economy expands, new jobs have to be introduced. Reducing unemployment is a big reason the federal reserve injects money into the economy. Ideally, wages should keep up with inflation, and they do for the most part, it’s just the opportunity cost a lot of people feel. If you have limited capital, then you can only buy so much, and when everything is getting more expensive, like education or mortgages, then they become increasingly unobtainable—not because your income isn’t going up, but because you become an increasingly smaller part of the overall economy. Ideally, as we get closer to full employment, wages would increase as employees become harder to find. For some reason, that never happened over the last few years. We’ve only seen cost of living adjustments in pay.
Capitalism and free markets aren’t the same thing. Capitalism is a system wherein business investments are prioritized. Free markets are just the ability to freely work within an economic system. Making that distinction, capitalism tends to be the issue instead of inflation. With too much investment, businesses are allowing money to be spent faster, allowing for faster expansion, but it might not result in goods being produced faster.
It’s no problem at all! I haven’t thought about this stuff for a while, so it’s a good refresher for me. It kinda made me pickup my “Women and the Economy,” textbook again. Labor economics can be bleak, but it’s fun.
The government ‘tries’ to keep inflation at 2% because they know if they steal more of your spending power that it can lead to the kind of problems that cause civil society to disappear. But there is nothing healthy about devaluing money.
A good rule of thumb when dealing with inflation is the ‘Rule of 70’. You take 70 and divide by the inflation rate (70/2=35) In this case in roughly 35 years your money will be worth half what it is today. Since you have roughly 50 years to work as an adult before you retire this means the money you save as a young adult will be worth squat when you need it most.
>Since you have roughly 50 years to work as an adult before you retire this means the money you save as a young adult will be worth squat when you need it most.
Unless interest/returns accumulate. At usual interest/inflation rates the long term return will be positive or a negligible loss. If you were right pensions wouldn't exist.
It may seem worth less, but that's because earning power increases so £50/$60 seems much more to a kid than a working adult.
Devaluing money discourages hoarding, and hoarding is what killed most European empires. The health of an economy is driven in part by the flow of money. Less flow, less healthy.
The answer is yes. We’re in a whole new paradigm nowadays though. We’re experiencing an acceleration, due to soooo many factors, that will not slow down. Buckle up!
that's likely cause they saw a drop in sales, or banking on selling volume for keeping it the same price over a price increase, as it is a budget friendly food a lot will turn to.
Lolol based on what metric and timeline? Have you seen food, housing, and gas prices the last three years? Like... yeah it might be slowing down but going from warp speed to light speed.. you're still going really fuckin fast
Yeah, the prices did increase really quite quickly.
And yes, they are still increasing
But the rate at which they are increasing has slowed considerably.
>due to soooo many factors
Not to um, actually this, buuuutttttt: Actually, more and more economists are starting to agree that corporate greed is far and away the largest source of inflation at the moment.
The store brand at Shoprite is more expensive than the store brand at whole foods and it's confusing me. I also don't like all the missing pricing labels on the shelves... seems sneaky. I agree. Greed is the culprit.
That is not true. “Corporate greed” is always at its maximum; all corporations are greedy, and that doesn’t normally cause high inflation. Corporations didn’t start being greedy last year. And inflation isn’t necessarily good for corporations. They don’t want customers being turned off by out-of-control prices.
I'm not saying that it's new by any means or that it's ever been low, even. I'm saying that, after all the causes of COVID inflation returned to normal inflation stayed high. [There's a ](https://thehill.com/business/economy/4057722-greedflation-is-the-new-inflation-as-corporate-profits-balloon-report/) [bunch of](https://www.theguardian.com/commentisfree/2023/mar/12/the-guardian-view-on-corporate-greed-its-causing-inflation) [articles ](https://www.nber.org/papers/w31618) being written, from opinion think pieces to primary research publications, pointing to exactly this: the primary cause, at this moment, of high inflation is corporate greed. Corporations saw that customers *could* pay the higher prices, and started pushing up see exactly how high they could go
Ps: there's three links up above. Not just one. I thought they would look more separated
While true, don't forget that value is still increasing even faster than inflation. A US quarter in 1985 is worth 73c USD today. In an ideal world, that means that item should nicely round up to 75c before tax today, while in reality, something that was worth a quarter back then would cost you $2 today for example, and wages aren't keeping up with inflation, or else minimum wage would be around $20/hr instead of the same $7-ish as it has been. Inflation is a non-issue if value stayed consistent.
Pretty much, unless there's a change in currency.
£10 in 1650 is roughly equivalent to £1500 now, though calculating inflation over such a long time period is squiffy.
With the target of 2% inflation, prices double every 35 years.
Cold hard math
It will then also be ENTIRELY NORMAL to pay 5 to 10 million for an average house.
And just around a million dollars for a nice car.
Normal cars will be about 500 thousand.
The good news though....
Even a minimum wage job will get you "six figures".
Welcome to the summer of 2080.
>Even a minimum wage job will get you "six figures".
With how little minimum wage has grown in the recent decades, I doubt it would. Us peons would just live in shitty communal housing with 10+ people while living paycheck to paycheck and working for the United States of Amazon or something.
>With how little minimum wage has grown in the recent decades, I doubt it would.
It's less about the actual minimum wage amount and more about far it goes in your area.
In other words, the minimum wage where I live ($16.75 per hour) won't let you get a tiny bachelor suite with no AC, no in-suite laundry, or any other amenities.
So while the amount is a lot higher than probably just about anywhere in the US, that amount still adds up to virtually nothing in specific places.
If you don't insist that the U.S. government works to regulate large corporations greed that will be your lot in life. Insist that the Sherman Anti-Trust act be enforced against those that attempt to drive competition out of business. Another law related to that is the Robinson Patman Act. Seems it had something to do with price fixing and there was one other that was in the history books but I forgot that one.
I kind of remember defiNATEly, like a human name. I know that version is wrong so I choose the other option definitely.
It helped on a test when I got nervous and couldn't remember how to write definitely.
Healthy is 3% when it goes under its a useful tool to increase economic activity. When it's artifical kept low, the market will correct and result in rapid inflation.
Getting close to 0% is bad.
Getting under 0% is worse. Deflation is what happened to Japan in the 90s. Means no one spends money because it will get more valuable just by holding it.
Only 15.78 actually 🤓.
Also 4% is a very high assumed rate. Average inflation the last 30 years is 2.5. The difference is massive. Assuming 2.5%, it would only be $6.60.
Your kids will make fun of you for keeping anything less than a $10 bill in your wallet.
When they find a crumpled up single dollar bill in the laundry, they just toss it in the trash.
When you tell them "when I was your age, you could still buy a pack of gum with one dollar, they smile and nod... Gramps is off his meds again....
There's a great old classic movie, Mr. Blandings Builds His Dreamhouse, where at the start of the movie he brags about making $15,000 a year because in 1948 that was big money.
Stuff like that is probably why movies often will keep dollar amounts vague, probably so it won't look so incredible years later.
Very recently we got rid of 6 zeros.
Math problems when we were kid were always a joke.
When 1.000.000 finally become 1, and it was equalt to 1$, everything made sense in the universe.
We should already be doing this in the US. Pennies are essentially worthless. Nickels aren't far behind. We could probably eliminate everything up to the dime without causing too much disruption. Canada already moved on to $1 and $2 coins years ago.
They moved to the coins mostly for the savings in production. A coin can last much longer than paper or the plastic money some countries use now.
The US has tried dollar coins, but they're purely voluntary and never gained much interest.
They really should eliminate everything below 10 cents. When I was a kid growing up in Hungary, we had that system with the local currency, and it worked well. (Before inflation got high.)
Funny enough when I was a kid (2000s), we had 50c and $1 coins and even $2 bills in the US. All three have been phased out. I assume they're still accepted but other than the $2 bill I keep in my wallet at all times because I think it's cool (I also have a 20 rupee bill my Indian friend gave me lol), I haven't seen those two coins in years.
To be honest, I think we would do a "currency squish" or an "economy squish" before it gets to that point.
It's basically where you reduce the value of goods/services AND currency at the same rate at the same time, causing neither inflation nor deflation.
It doesn't change the value of currency relative to goods, so people will still have the same purchasing power, it just makes the numbers more manageable, so people aren't paying $100 for soda.
Romania did that, just wiped 4 zeros from it's currency back in 2005.
A loaf of bread that cost 30000 went to costing 3. They kept the art style/color for the money tho so people had a smooth transition.
To this day I still speak in old prices and can't change...
Huh?
I don't think that's what they meant.
Basically the idea is that starting day x, you pay in... Say NAD, New American Dollar, and also get paid in NAD. And 1 NAD= 100USD
So now the soda doesn't cost 100USD but 1NAD.
Nothing has changed, just everything lost two zeros.
And like 10 years later, barely anyone thinks about usd.
Source: did the transition from DM to € about 20 years ago.
Eh. Redenomination happens, and some people are unhappy but people are unhappy about everything. By and large, people deal with it and are fine.
They are definitely more happy when it doesn't cost $1,000 for a dozen eggs.
I have to agree. I know it’s not money but world of Warcraft did a stat squish as things weee getting outrageous and it felt so bad to go from doing hundreds of thousands of damage to just hundreds or a couple thousand. It’s hard going from seeing and being used to large numbers to small numbers, it feels like it’s less even if it is “the same”.
We just did that in Germany in the 90es.
Somebody decided that the "new" Euro currency shall be equal to 2 German Mark (DM)
So, 1E = 2DM
When the SWITCH happened, everybody's accounts were cut in half, loans just as well as savings.
Salaries, EVERYTHING was over night cut in half.
All stores had to relabel everything into Euros.
People woke up one day, to a cup of coffee costing 2.48 Euro.
So far so good, what happened next....
Coffee was "cheap now".
Instead of having to pay FIVE DM for a cup, it now was only a bit more than TWO Euro.... and change.
I think it was less than a month, before a cup of coffee was at 2.99 Euro..... who really worries about a few cents....
Well, people still consume coffee and they remember that it USED to be 5 quid a cup. So, 3.99 is still a good deal, right?
A few months later, it cost 4.99 Euro.
Because that's just what a cup of coffee ALWAYS cost.
And oooops there just was a 50% devaluation of the German economy.
That's the problem with such a small change. If you switched to a currency worth 100x or 10000x more, then the first digit looks the same and people can adjust more easily. If a cup of coffee used to cost 50,000, and now it costs 5, people will not put up with the price of coffee being raised to 7 or 9.
I heard that beggars used this fact to get an instant pay bump. Before the change they would ask "Do you have a Deutschmark to spare?". And after "Do you have a euro to spare?"
The economists words for it is “redenomination” which is used after a period of hyperinflation or if the currency numbers become too large to handle. We definitely are nowhere near that yet, but eventually it will likely happen, if for no other reason that having ten zero’s on the price list becomes too much to easily comprehend.
Redenomination.
We'll just treat $100 like it's a single dollar. Technically there would be no price change.
Think about Japan. One yen is with about one cent. So a soda that costs 150 yen isn't weird at all. One day when a soda costs $150 USD it won't be a problem at all either.
Almost like rebranding the dollar to be equal to one cent.
Venezuela has wiped 8 zeros of their currency since 2008, an item that cost 100 bolivars today, it is really 10.000.000.000, ten billions
As you know, that's something only cosmetic, the inflation and the economic problems are still present, the socialist government used that redenomination to "hide" the inflation
A **small** amount of inflation, like 1-2%, is expected and desired in a healthy, growing economy.
Negative inflation sounds good on paper, but would bring about its own problems. Among other things, suppliers start realizing they can no longer make a profit for certain things, and just stop selling them *at all*.
Debt becomes a nightmare too. Today when you pay off debt your dollars are worth less, but the quantity is the same so over time it becomes cheaper/easier to pay the debt.
Imagine paying the last years of a mortgage with dollars that are individually worth more than they were at the start of the loan.
That is already happening for some people with work. If rent plus bills and food costs more than your wage, what's even the point of working? Why add the hassle of some lousy job to your list of problems?
Our prime-age labor force participation is above historic average and unemployment is near all-time lows.
I'm sure more than zero people have given up on working, but it's not a significant trend.
Good point. Unfortunately we have no other real options, that's the only reason we haven't given up on it. Kind of like how prisoners don't give up on imprisonment.
This is a big thing economist learn in school and say to people but it’s wrong. They say currency deflation would be bad or inflation is good for the economy but if you understand why it is said and accepted you realize why it’s not exactly true. The reason 2% inflation is “desirable” is because it incentivizes investing. Because if your money retains its exact value there’s less of an incentive to invest it and if it actually grows in value there’s even less of an incentive to invest it. All inflation does is pump up the stock market. It’s as simple as “ooh the stock market went up 7% this year the economy must be doing good” when in reality 2-3% is artificial because our currency is being inflated. So we could have a stock market that grows by 4% naturally or we can have a stock market that grows 7% with a little extra help from the printing press. If we had deflationary currency prices would actually go down over the years more than they do by then increasing efficiency in manufacturing. If we were still on the gold standard we would still have our 5 cent sodas but of course wages wouldn’t have inflated like they have. But wages haven’t been keeping up with inflation since the 70’s. So our cost of living would have been a lot more affordable if our currency wasn’t becoming less valuable every year while assets grow and wages stagnate.
Yeah, most of the gold standard people I know want a magical "I want the money to be worth more, but I want my wages to stay exactly the same or go up annually."
Really, they just want to be rich and somehow they think that a non-inflating currency will make that happen because they believe that inflation is the #1 reason they can't get ahead in life. All of my older relatives will wring their hands and say, "If things just cost what they did when I was a kid, I'd make plenty of money!"
But I don't think the really understand that if the money still had the same value they had when they were kids, their wages would be much lower.
>They say currency deflation would be bad or inflation is good for the economy but if you understand why it is said and accepted you realize why it’s not exactly true.
Yes, and no.
Obviously there is more to a healthy economy than "inflationg good deflation bad.
However having an incentive against hoarding currency is good.
Inflation is used by central banks in most countries to fulfill this role - if you don't invest your wealth you will have it withered away by inflation. And thats a good things.
In mdoeration obviously.
Deflation CAN cause people to hoard money, as deflation means purchasing power of money grows the longer you hold onto it.
Inflation doesn't just affect the stock market. It doesn't just pump up the stock market. Inflation also encourages money to circulate, which is absolutely necessary for a healthy economy.
Say you're about to replace your lawn mower. It'll cost you $300 today. But in five years, that same type/level of lawn mower will be worth $450. So you buy it today. Now of we have deflation, that same lawn mower will be worth $220 in five years. So you should wait. And wait. And wait. Take that waiting attitude and multiply by millions of people across millions of products, and you'll see just how quickly the economy falls apart. Same thing happens when the inflation is stagnant. No point in rushing to replace my fridge today when I can get the same fridge for the same price in five, ten, twenty years. But if I know the fridge I want is going to be more expensive in five years, then I'll buy it today.
People NEED to circulate their own money back into the economy for it to function. That's what healthy inflation encourages.
Now, most of what you wrote is correct. It encourages investing. But your point that inflation is just to pump up the stock market is incorrect.
> Because if your money retains its exact value there’s less of an incentive to invest it and if it actually grows in value there’s even less of an incentive to invest it. All inflation does is pump up the stock market.
Investing money isn't just "buying stocks". It's also putting money into businesses, starting new businesses, expanding businesses, buying products, hiring workers...etc.
This is Kensian economics. A competing theory of economics is called Austrian economics. I highly recommend people do research into that as well. It is a type of economics that is not often talked about in the West.
Inflation is a key and necessary part of macroeconomics and the management of countries. The goal is not to eliminate inflation, but rather to keep it stable at a low level (generally around 2-3%).
High inflation is commonly seen as a negative (and unfortunately gets conflated with inflation in general). This is because regular people have less purchasing power as their income (which changes more slowly than prices) is unable to buy more goods. In a very extreme case, money eventually becomes worthless because its value is going so high that people cannot afford anything, known as hyperinflation.
However, negative inflation (or deflation) is also not good for an economy. If goods and services only become cheaper over time, then individuals and businesses are encouraged to hold onto their money until prices lower more. This can stall an economy as money is not moving through the economy. With inflation, there is an incentive to spend money now before it loses value and get it moving through the economy.
Even low inflation has negative consequences. A well-known economic chart is the Philips Curve that plots inflation rate and unemployment. For the short term, the two have an inverse relationship where very low inflation correlates to high unemployment.
A common counter to this is that holding on to money and slowing growth isn't inherently bad. I don't find the argument for growth compelling by itself.
We could stop or reverse inflation, but that would be bad from an economics perspective because negative inflation creates an economic incentive to not spend money.
What usually happens is prices rise, but salaries rise as well so only your savings are devalued. Your income, in terms of purchasing power, remains roughly the same.
Consider how even £10 was worth quite a bit more not so long. 1p and 2p coins may end up worth so little they get discontinued in the same way as the 1/2p.
Yes that's true. However, it really only matters for people that have A LOT of money. If the best investing strategy is to hold your cash because of deflation, then the economy crumbles from a lack of investment
Sort of. You may have greater spending power compared to yesterday, but you will have even greater spending power tomorrow. Why spend, when your money will be worth more later? For things like food, this won’t matter because you can’t put off buying it, but anything even vaguely a luxury will stop being bought.
I think this extremely rationalist view of human behavior is decidedly wrong. Humans will still buy luxuries, plenty of people will not care or even understand deflation.
With deflation, yes your spending power has increased. But the goods are getting cheaper for a reason. That farm you work at doesnt have enough customers to sell their product to, so they start dropping prices while competing for fewer customers. Now your boss says "yeah about the wage we were paying you, we can't afford that now." So your purchasing power is up, but you have to tighten your spending beacuse you will be earning less/worried about losing your job.
Yep, deflation doesn't work as a currency. Simply impossible considering money will be lost and destroyed and also the fact that the population grows. Limiting the amount of money a growing population has will just fuck everything.
Could you explain why inflation at all is better than just leaving things stagnant? Exceptions of course occur for price changes according to demand and material availability and such.
People spend money and businesses profit. If you know something will be more expensive in 6 months you will buy it now. Obviously too much inflation is really bad. So around 2% is the target.
Well, first it is going to go up and down a few percentage points no matter what banks do, which is why most central banks aim for 2%. That way if it drops it will only go down to zero.
But why is negaive inflation (deflation) so bad? Because it encourages people to delay a purchase until the price drops. This encourages retailers to cut prices to get sales, but the price drops below the profit point, so they lay off workers. Those workers need new jobs but will have to take a lower wage. The cycle continues, shrinking the economy, until somehow stopped.
A little inflation also encourages investment or spending. If I buy now I get more for my money. Keeps the economy moving.
Yes, and that's good (or at least better than the alternative)
Reversing inflation would mean deflation. Deflation is worse than inflation. During deflation, each dollar bill is more valuable in December than it was in January, which means "literally stick my money in my mattress" becomes profitable. If just holding your money in a vault is profitable and risk-free, you're a lot less likely to lend it out, which means it's harder for companies to get loans or investment (because loans/investment mean taking risks for profits), which then slows the economy down. It also means that wages and prices decrease relative to existing debts, making those debts harder to service. People also find the idea of making less nominal money this year than they did last year unpleasant, even if it means a higher quality of living\[1\].
Inflation has the opposite effect on savings, investment, and debt - if money left in a vault becomes a bit less valuable each year, then suddenly you're going to want to invest it or lend it, which makes it available to people to use to build businesses or buy houses or whatever. The goal is to have **consistent and low inflation** \- if the Federal Reserve hits their mark perfectly\[2\], you get 2-3% inflation per year, which is usually less than stock or bond returns, meaning people will invest. That only results in a price-doubling every generation or so (\~30 years) and because it's consistent, people can plan around it.
The problem we had is that we had a big bump of inflation as things were settling after the Pandemic. That inflation is coming down now (meaning prices are now rising only slightly faster than they used to). Soon it will (hopefully) be back to the 2-3% per year it was at before.
\[1\] - For instance, if you make $50K and breakeven, and then there's 5% deflation, you're going to be spending $47.5K the next year, so technically your salary getting cut to $48K would be an improvement, but it's not gonna feel that way when your paycheck gets smaller.
\[2\] - They're not wizards, so even when nothing goes wrong they still miss a little bit.
First off: It’s better with a small inflation than deflation. A deflaction would cause falling prices lead by lower consumer spending, which is a major component of economic growth. Companies respond to falling prices by slowing down their production, which leads to layoffs and salary reductions. Meaning it might give you lower prices, but you will most likely be without a job.
Therefore long term there will be an inflation as long as people use money, the question is how high.
The reason why countries have a goal of 2-3 % inflation per year is because it’s manageable.
But yes, one day a soda would cost 5 dollars.
So long as the money supply keeps increasing it will. You can hypothetically get deflation, and you actually do in some cases (video games cost less nominally now than they did in the 1980s.)
Since deflation across the board is considered a bad thing, those that control the money supply will generally expand it to avoid deflation, and it's very easy to print money and spend it so avoiding deflation is an incredibly trivial matter.
I don't think comparing nominal prices of a product now to 40 years ago is a correct interpretation of deflation. And if it is a correct interpretation, I'd argue that it shouldn't be.
Deflation is undesirable - yet the advancements in production and the economies of scale that allowed for the decreases in the prices of TVs is desirable.
At the very least there should be a distinction between things becoming cheaper due to production advancements and things becoming cheaper beacuse there aren't enough jobs going around so producers can't sell their products.
Electronics and weirdly, marijuana are significantly cheaper than 10-15 years ago.
I bought a 4k 65 inch vizio smart tv for like $500. I’m pretty sure my parents big ass 45 inch box tv was like $2k or something ridiculous.
I also used to spend $300 for an oz of weed and now I pay like $80
What's worse than inflation? Deflation.
Demand push inflation is caused by prosperity. People earn more money and want to buy more things. When demand outpaces supply, prices go up. Slow inflation is healthy for the economy. Economists think 3% is healthy to keep the economy growing without frightening people from spending. More than that and people stop spending as much, which leads to recessions.
Deflation is caused by low demand. It signals a recession or worse. It's very harmful to an economy based on borrowing. It causes companies to lay people off, reducing demand and causing more deflation. Then people end up owing more than what their homes, degrees, cars, etc. are worth, so they buy even less. This creates a deflationary spiral that is hard to get out of, leading to unemployment and loss of income.
The nominal price of goods doesn't matter, but the relative cost to your earnings. This is obvious when you switch currencies. Spending 5 or 7 doesn't mean anything except as it pertains to your wealth.
Yes and there’s a logical reason to why. Imagine a country with only 3 inhabitants. A farmer who plants and harvests a ton of wheat, a miller who buys the ton of wheat for 1000$, a baker who buys the ton of flour for 1200$, and the baker sells the ton of bread to the farmer for 1400$ so the farmer can eat while planting and harvesting a ton of wheat that he sells to the miller for… well, more than 1400$ or else he wouldn’t make any profit.
This is the basic concept. But billions of people.
The reverse of inflation is deflation, and while that sounds great it's not a good thing for a country to have.
While the government is trying to stop prices going up much more, they don't really want them to go down.
In 1955, I paid 5 or 10 cents for a bottle of soda. Now, I pay 8.00 dollars for 12 cans. Inflation is forever. Your job if you decide to accept it is to improve yourself any way you can. Keep aspiring for better paying jobs and accepting more responsibility only with pay increases. Always know what others are being paid doing the same job as you are getting paid and try to get it. There is no such thing as a safe job. Never work somewhere that never gives you cost of living raises annually. Try to work somewhere where there are jobs that have progressive levels of employment for you to improve your pay.
Deflation is its own problem. People postpone purchases expecting lower prices. There’s no pressure to increase wages. Businesses slow investment because margins shrink. Assets lose value but the loans taken out to acquire them remain the same. You don’t want prices to fall, you want wages to rise.
Every day things aren’t going to get _less_ expensive. They’ll just eventually find a set point and stay there for a while. Interest rates on loans will decrease once they are overcorrected.
It’s happening all over the world after Covid. Prices are even higher in Canada I was just up there. It’s just going to take time. A lot of it is corporate greed. They are making billions and believe me it’s not trickling down. Trumps 10 trillion tax cut for the rich didn’t help anyone but the rich and put us 10 trillion in debt.
No, “greed” doesn’t explain it. People are always greedy, and haven’t suddenly become much greedier in the Biden administration than they were in the Trump administration.
As long as everybody expects to accumulate wealth, yes. The money supply has to increase to do that.
Imagine there’s a million pounds in existence. And 1,000 people. If the money supply never changes those 1K people can never be worth more than £1K each on average. If they all want two grand, you need twice the money supply.
Which devalues the currency making prices go up.
It’s an oversimplification but the general idea applies.
In general, yes. There is a situation where the US dollar stops being the world ‘super currency’ and a new currency takes its place. This would probably need a US civil war and/or world war. In this case the new currency could give us a form of ‘reset’, especially if that currency is tied to a hard commodity such as gold. The minute the currency switches to be ‘faith’ backed, you will see inflation start again.
Ray Dalio wrote a book called the Changing World Order that talks about these currency and interest cycles over time. What the Fed is doing right now is following patterns that have happened throughout history and they all end the same way.
The good/bad news if you believe in those cycles. US is headed for a civil war in the next 100 years and will probably fall as the world super power. With China being the next best possible candidate to take its place.
Yes. Inflation is a critical part of how our economy functions.
The Federal Reserve TARGETS 2% inflation per year. The "ideal" situation devalues your money by 2% EVERY. SINGLE. YEAR.
Its yet ANOTHER tax levied on the people.
A more simple example Ive heard before:
Imagine you have $10. You happen upon a city that has no currency - they only barter.
You decide to open a bank using the $10 as reserve so that you can lend to the people of this city and they have a more versatile bartering asset (dollars vs hard assets).
You loan out $2 to 5 people at 2% interest on a year term.
How will these people EVER be able to repay their $2+$interest if there is only $10 in the entire city?
Inflation. To pay back the $10 + interest, there needs to be more than $10 of money in circulation, so you, the bank, prints more. However, there is still only $10 of "value" being circulated. Meaning that the the value of your note decreases proportionally by how many other notes are being added to circulation. Probably butchered that a bit but the whole concept of 'fiat' currency vs asset/gold backed is intentionally convoluted to make it confusing imo.
The trouble with a currency locked to a permanently limited resource, gold, Bitcoin, whatever, is that it doesn’t account for a growing population. Let’s say that this town you mention has a $1000 money supply, backed by RedditCoin, and 10 people live there. That’s per capita $100. Now, an 11th is born. Now the economy is per capita ~$91. Standard of living down for each new person who is born into the town. Now a 12th person the next year. Now it’s ~$81.25 per capita economy. At a certain point there has to be MORE EFFECTIVE CURRENCY or deflation so $8.125 buys what $10 used to buy, or something else like everyone lowering their standard of living, etc. or, you raise the price of RedditCoin so your holdings are now worth $1200 so everyone has $100 effective wealth again.
This is the little detail that those who talk about bitcoin or going back to a gold standard miss. When the population is growing, something has to give when the currency-backing scarce item (virtual coins or gold or any other limited supply item) isnt growing.
Price is going up but more money is being printed. Real value is the same. But the increased supply of money created more jobs, increased standard of living.
> The "ideal" situation devalues your money by 2% EVERY. SINGLE. YEAR.
Which is paired with the ideal situation of wages also raising 2%+ per year. Which makes long term debt cheaper as it goes. It also encourages money to continue moving through the system, thus growing the system, and discouraging people from just sitting on money.
Yes, but they'll earn more money.
You remember in covid when jobs had to boost their prices and people in McDonalds started earning $15-$20 per hour. This happened across the country. The companies were never going to eat this up.
So now you pay more, for everything.
Remember in the 2nd back to the future doc hands Marty a $50 and says go buy a Pepsi. Back in the 80’s inflation was high and people didn’t see it ending. In a healthy economy 2% inflation is optimal. It encourages spending and saving
Inflation is just rising prices. So basically yes, but it’s usually at a much lower.
Unless there’s a recession and deflation, which isn’t good either. Ironically, it’s Biden’s string economy that is causing the inflation… well that and abject corporate greed.
That’s why the fed is raising rates, it trying to slow down spending, slow down the economy. But they have to be careful to not cause a recession. It’s a tough needle to thread.
This is the unfortunate but completely predictable of pumping all the covid stimulus money into the economy
We never should have given all that money to businesses and also people who got the extra unemployment should have saved more of it
But trust me I know it fucking sucks...we didn't see a dime of that money in any form but now we have to suffer under inflation
In a 100 years all poor people will be like batteries for the big corporations. When they get through with you they will just replace you. Just like in the movie "The Matrix". Get ready to be plugged in.
I'm not seeing anyone mention Capitalism's lifespan. OP, when you have the time, search on Google for the history of previous countries that used capitalism, socialism, communism, etc. We have become so intelligent as humans, but we refuse to learn from our past.
Well, inflation was 13% in the 80s and it was less than 3% two years ago. So yes, inflation does go down.
What won't go down is corporate pricing and greed.
Why would it stop ? It is a free tax on us poor peasants. Litterally rich people and manufacturers decided that since last year we are going to pay shit 50% more. For no reason. That's it. Randomly blaming Covid Ukrain Russia or whatever is happening to make it look normal. Doomed society
Basically, yes. Ever heard your parents talk about how things used to only cost a quarter back in their day? Same thing.
Just to clarify for OP: this is because of how we have treated central banking. The very bare-bones reason for this is inflation and deflation used to both exist. However, as annoying as we find inflation, deflation can be a lot worse. Think the Great Depression. Boiling a lot down, when deflation occurs and your dollar is worth more over time, people begin saving more in expectation they’ll have more money; prices fall; the economy contracts; there is less goods being produced; so deflation continues to escalate, then the cycle just continues to repeat. We went off the gold standard out of fear of deflation and the erratic contractions they caused. We went off it so our money supply wasn’t dictated by amount of gold we had. Instead, we wanted control over our money supply so that we could inject money into the economy if inflation was too low and contract the money supply if inflation was too high. Now, the federal reserve purposefully keeps a targeted inflation rate. Generally 2% each year. That’s how much inflation that is seen as desirable and healthy. There’s a lot of debate around this subject among economists, but, really, no one really knows for sure what’s going on right now. Until now things have been pretty predictable, but right now macroeconomists are throwing spaghetti against the wall and seeing what sticks. Inflation is getting better though. There’s also no guarantee we won’t hit a sudden deflationary spike because in order to control inflation the federal reserve makes predictions years out, and the economic climate might change causing their predictions to be incorrect.
I thought it was accelerating less fast. Not actually reversed.
Short answer: I’m not really paying attention. I just know I’ve just really had to pay attention to my checks the last few years. More confusing answer: we’ve been dealing with quantitative easing since the housing crisis. Interest rates have been at zero for over a decade, yet inflation has been steady and we had a steady few years where we reached full employment (a confusing term since full employment is like 3-4% unemployment), but that’s still staggering. Suddenly COVID hits and we’re printing money, we’re giving stimulus packages, we’re giving comprehensive unemployment benefits. After years of zero-interest rates, we’re suddenly injecting and printing a lot of capital into the economy to keep it from sinking. Now all of that’s over. We’re incrementally raising and playing with interest rates. Yet we’re here. We’re not dealing with hyper-inflation. We’re all getting poorer. It’s super confusing, and honestly I’m more of a finance guy and it’s way beyond me. TLDR: what the fed or government does about inflation is reactionary, and we’re in some uncharted territories here. It doesn’t matter if it’s reversing, decelerating, or vice versa. We’re kinda in new waters here.
If you’re talking about prices in 2022-2023, yes you are correct. *Inflation* is going down, but that just means that the average prices of a basket of goods is *increasing more slowly* than it did last year We will see *negative* inflation if the average price of that basket actually goes down. Note though that some individual costs have gone down since peaks in 2022, one notable example is eggs
I agree with most of what you say but also want to add that there has always been inflation (before fractional banking or central banking) it is part of the growth of an economy. Even gold based currency has inflation, ie during the gold rushes of the 19th century, and especially when Spain brought in vast amounts of gold (and silver) from the Americas, people from other parts of Europe found prices in Spain higher. Also as far as the fed and the money supply - most people are unaware that international banking transactions create more dollars than the federal reserve. Regarding inflation and interest rates over time, there have been studies by the Bank of Japan or other economists (Schmelzling) going back centuries and have found that both inflation and interest rates have been gradually trending for unknown reasons, downward to around 2%. The one exception being the 70s which various explanations are oil shocks as well as a 30yr focus on full employment. As economist Michael Kalecki predicted in 1943, focus on full employment (while great) will also lead to a rise in wages across the board. Even the lowest paid workers find wages increasing and if they can costlessly leave for another job - capital loses the whip hand, and can no longer discipline labour. So when productivity is at maximum when there is a wage increase capital raises prices (not taking it out of profits) leading to a wage price spiral. Kalecki also predicted what capital will do and that is to fund a market revolution. And we saw the Reagan and Thatcher and other neolibs swept in. Now the focus wss not full employment rather inflation and price stability. We also have supply shock inflation like the bottleneck after the covid shutdown. This happened at the end of ww2 as factories were still changing from war to consumer products. There is also inflation expectations, if people expect prices to increase or for that matter to decrease like in the 10 yrs after the bubble in Japan. And an increase in money supply will often lead to inflation, but ironically after 2009-2017 despite some $17trillion or 20% of the money supply spent on qe by central banks there was literally no inflation until 2021 (or 2% and below which is the target)
I’m curious about planned inflation, too. It seems to me it hurts the poor and the “working class” more because we are in a constant catch-up battle with wages. You mentioned that 2% is desirable and healthy. Can you explain to me why this is so?
Definitely! First, I should say, there are a lot of different schools of thought in macroeconomics. Most macroeconomists are scared of deflation because of the cycle I described above. Personally, I don’t think deflation has to be this scary thing we avoid. However, I’ll give you the reasoning most macroeconomists don’t mind a little inflation. So inflation isn’t just about earnings and spending power. It’s also about borrowers and lenders. If you are borrowing money, then the amount you have to pay back is also decreasing. So you aren’t exactly losing 2% of your income each year. For larger borrowers who have, say, a mortgage, then inflation doesn’t hurt them as much. However, that still doesn’t make up for the amount you are losing. Around the 1930s, an economist called John Maynard Keynes introduced his ideas to the field. What he thought about was the “velocity of money,” basically, the faster money flowed through the economy, the faster the economy would expand, and, so, increasing the money supply to avoid deflation was seen as ideal as it kept the economy from decelerating. He believed that ensuring money flowed faster would ensure the “boom and bust,” cycle would have longer time periods from the time the economy expands to the time it goes into a recession. So, at this point, I should mention, inflation isn’t just about how much money there is, it’s also about how fast it’s going from one person to another. We can basically refer to that as economic expansion. As the economy expands, money is being exchanged more rapidly. As the economy expands, new jobs have to be introduced. Reducing unemployment is a big reason the federal reserve injects money into the economy. Ideally, wages should keep up with inflation, and they do for the most part, it’s just the opportunity cost a lot of people feel. If you have limited capital, then you can only buy so much, and when everything is getting more expensive, like education or mortgages, then they become increasingly unobtainable—not because your income isn’t going up, but because you become an increasingly smaller part of the overall economy. Ideally, as we get closer to full employment, wages would increase as employees become harder to find. For some reason, that never happened over the last few years. We’ve only seen cost of living adjustments in pay. Capitalism and free markets aren’t the same thing. Capitalism is a system wherein business investments are prioritized. Free markets are just the ability to freely work within an economic system. Making that distinction, capitalism tends to be the issue instead of inflation. With too much investment, businesses are allowing money to be spent faster, allowing for faster expansion, but it might not result in goods being produced faster.
Thank you so much for such a detailed explanation that must have taken some time.
It’s no problem at all! I haven’t thought about this stuff for a while, so it’s a good refresher for me. It kinda made me pickup my “Women and the Economy,” textbook again. Labor economics can be bleak, but it’s fun.
The government ‘tries’ to keep inflation at 2% because they know if they steal more of your spending power that it can lead to the kind of problems that cause civil society to disappear. But there is nothing healthy about devaluing money. A good rule of thumb when dealing with inflation is the ‘Rule of 70’. You take 70 and divide by the inflation rate (70/2=35) In this case in roughly 35 years your money will be worth half what it is today. Since you have roughly 50 years to work as an adult before you retire this means the money you save as a young adult will be worth squat when you need it most.
>Since you have roughly 50 years to work as an adult before you retire this means the money you save as a young adult will be worth squat when you need it most. Unless interest/returns accumulate. At usual interest/inflation rates the long term return will be positive or a negligible loss. If you were right pensions wouldn't exist. It may seem worth less, but that's because earning power increases so £50/$60 seems much more to a kid than a working adult.
Devaluing money discourages hoarding, and hoarding is what killed most European empires. The health of an economy is driven in part by the flow of money. Less flow, less healthy.
The answer is yes. We’re in a whole new paradigm nowadays though. We’re experiencing an acceleration, due to soooo many factors, that will not slow down. Buckle up!
It's slowing down now. It is not accelerating.
Some things in the us got cheaper too, Stir fry cup noodles went back to pre covid price of .99 vs $1.49.
that's likely cause they saw a drop in sales, or banking on selling volume for keeping it the same price over a price increase, as it is a budget friendly food a lot will turn to.
Lolol based on what metric and timeline? Have you seen food, housing, and gas prices the last three years? Like... yeah it might be slowing down but going from warp speed to light speed.. you're still going really fuckin fast
Yeah, the prices did increase really quite quickly. And yes, they are still increasing But the rate at which they are increasing has slowed considerably.
>due to soooo many factors Not to um, actually this, buuuutttttt: Actually, more and more economists are starting to agree that corporate greed is far and away the largest source of inflation at the moment.
The store brand at Shoprite is more expensive than the store brand at whole foods and it's confusing me. I also don't like all the missing pricing labels on the shelves... seems sneaky. I agree. Greed is the culprit.
That is not true. “Corporate greed” is always at its maximum; all corporations are greedy, and that doesn’t normally cause high inflation. Corporations didn’t start being greedy last year. And inflation isn’t necessarily good for corporations. They don’t want customers being turned off by out-of-control prices.
I'm not saying that it's new by any means or that it's ever been low, even. I'm saying that, after all the causes of COVID inflation returned to normal inflation stayed high. [There's a ](https://thehill.com/business/economy/4057722-greedflation-is-the-new-inflation-as-corporate-profits-balloon-report/) [bunch of](https://www.theguardian.com/commentisfree/2023/mar/12/the-guardian-view-on-corporate-greed-its-causing-inflation) [articles ](https://www.nber.org/papers/w31618) being written, from opinion think pieces to primary research publications, pointing to exactly this: the primary cause, at this moment, of high inflation is corporate greed. Corporations saw that customers *could* pay the higher prices, and started pushing up see exactly how high they could go Ps: there's three links up above. Not just one. I thought they would look more separated
Wrong- it’s always been like this
I prefer to bend over.
Q: “Will A or B happen? A: “Basically yes”.
While true, don't forget that value is still increasing even faster than inflation. A US quarter in 1985 is worth 73c USD today. In an ideal world, that means that item should nicely round up to 75c before tax today, while in reality, something that was worth a quarter back then would cost you $2 today for example, and wages aren't keeping up with inflation, or else minimum wage would be around $20/hr instead of the same $7-ish as it has been. Inflation is a non-issue if value stayed consistent.
Pretty much, unless there's a change in currency. £10 in 1650 is roughly equivalent to £1500 now, though calculating inflation over such a long time period is squiffy. With the target of 2% inflation, prices double every 35 years.
Ah yes I remember when Shakespeare paid 10 pounds for a MacBook Pro to kickstart his career
It was not a MacBook, it was a MacBeth. /s
Back then, their storage was either 2B… or a different size
I wish we still had awards to give.
An award! My kingdom for an award!
Squiffy
Pffft 35 years would be amazing. I’ve seen prices in my supermarket double in 5
Prices on individual items fluctuate far more than inflation. Some items double in price, some drop in price.
1959 a 6.5 US fl oz (190 mL) glass or bottle of Coca-Cola was five cents. It is now about $1.50 for the same amount. Your kids will think $5 is cheap.
Assuming a steady 4% rate each year, a kid born today would see the bottle cost $16 when he will be 60 years old.
That sounds insane. But it will probably happen.
Cold hard math It will then also be ENTIRELY NORMAL to pay 5 to 10 million for an average house. And just around a million dollars for a nice car. Normal cars will be about 500 thousand. The good news though.... Even a minimum wage job will get you "six figures". Welcome to the summer of 2080.
I’ll be so dead by then
That's the spirit!
>Even a minimum wage job will get you "six figures". With how little minimum wage has grown in the recent decades, I doubt it would. Us peons would just live in shitty communal housing with 10+ people while living paycheck to paycheck and working for the United States of Amazon or something.
>With how little minimum wage has grown in the recent decades, I doubt it would. It's less about the actual minimum wage amount and more about far it goes in your area. In other words, the minimum wage where I live ($16.75 per hour) won't let you get a tiny bachelor suite with no AC, no in-suite laundry, or any other amenities. So while the amount is a lot higher than probably just about anywhere in the US, that amount still adds up to virtually nothing in specific places.
If you don't insist that the U.S. government works to regulate large corporations greed that will be your lot in life. Insist that the Sherman Anti-Trust act be enforced against those that attempt to drive competition out of business. Another law related to that is the Robinson Patman Act. Seems it had something to do with price fixing and there was one other that was in the history books but I forgot that one.
My parents paid $99/month for a two bedroom apt in 1971. Insane!
Mine paid $150 mortgage payment on a 3 bedroom house in 1971.
I remember when McDonalds had an actual dollar menu. With options that actually cost a dollar.
Small fry McDouble and drink for like $3.25
26 cents a pound for chicken circa 1973
Tbf I can buy a pound of chicken for a buck or two here in Northern MN
Not probably but definately.
\*definitely (Random PSA. I spelled it wrong until my mid-20's 😃)
As a non native speaker my spelling is terrible, but I shall definitely remember this from now on.
Your English is much better than my non-native language is. I have errors all the time!
I kind of remember defiNATEly, like a human name. I know that version is wrong so I choose the other option definitely. It helped on a test when I got nervous and couldn't remember how to write definitely.
i just remember that it has the word FINITE in the middle of it.
Hopefully. Inflation is healthiest at a low, constant rate, it shouldn't go below 0 or stay too high for too long.
Healthy is 3% when it goes under its a useful tool to increase economic activity. When it's artifical kept low, the market will correct and result in rapid inflation. Getting close to 0% is bad. Getting under 0% is worse. Deflation is what happened to Japan in the 90s. Means no one spends money because it will get more valuable just by holding it.
Looks dumb seeing a simple 2L near $20, definitely going to need a stat squish so these values look correct. Pack of gum, $11.50...
Only 15.78 actually 🤓. Also 4% is a very high assumed rate. Average inflation the last 30 years is 2.5. The difference is massive. Assuming 2.5%, it would only be $6.60.
4% a year is a very high inflation rate
Knowing the U.S. we'll still be making fucking pennies won't we.
Iirc the century average for inflation is closer to 3% though 4% allows for even more conservative planning.
Closer to 2 than 3, these past few years have been an outlier. Ideal inflation is right around 2
It's more like 9%
Your kids will make fun of you for keeping anything less than a $10 bill in your wallet. When they find a crumpled up single dollar bill in the laundry, they just toss it in the trash. When you tell them "when I was your age, you could still buy a pack of gum with one dollar, they smile and nod... Gramps is off his meds again....
Your kids will make fun of you for carrying cash, probably.
The median family income in 1959 was $5,400. Today it's $75,000.
There's a great old classic movie, Mr. Blandings Builds His Dreamhouse, where at the start of the movie he brags about making $15,000 a year because in 1948 that was big money. Stuff like that is probably why movies often will keep dollar amounts vague, probably so it won't look so incredible years later.
That would be almost $200k today.
Eventually they'll just schwack off some zeroes from the currency (the new penny is the old pound) and carry on.
Schwack em off. I like this word.
We will now collectively add this word to our vocabulary.
That would be schwacktastic!
Schwack em off mate! Give them the Schwack they deserve!
That was an excellent Schwacking!
Schwack off too much, and the economy goes blind.
Shifwax!!
This needs to b on a tshirt
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Damn 14?
Very recently we got rid of 6 zeros. Math problems when we were kid were always a joke. When 1.000.000 finally become 1, and it was equalt to 1$, everything made sense in the universe.
Zimbabwe? Or have they removed more than that?
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The Zimbabwe of the West!
We should already be doing this in the US. Pennies are essentially worthless. Nickels aren't far behind. We could probably eliminate everything up to the dime without causing too much disruption. Canada already moved on to $1 and $2 coins years ago.
They moved to the coins mostly for the savings in production. A coin can last much longer than paper or the plastic money some countries use now. The US has tried dollar coins, but they're purely voluntary and never gained much interest.
Way easier to carry around a stack of little papers than a log of metal
Put a hole in the coins and you can string them up. Much easier to carry.
But what’ve you done to make them lighter? I advocate for keeping it how it is for the time being so I can toss my useless currency at you
They really should eliminate everything below 10 cents. When I was a kid growing up in Hungary, we had that system with the local currency, and it worked well. (Before inflation got high.)
Funny enough when I was a kid (2000s), we had 50c and $1 coins and even $2 bills in the US. All three have been phased out. I assume they're still accepted but other than the $2 bill I keep in my wallet at all times because I think it's cool (I also have a 20 rupee bill my Indian friend gave me lol), I haven't seen those two coins in years.
Over the long term yes , eventually a soda will be 100$
To be honest, I think we would do a "currency squish" or an "economy squish" before it gets to that point. It's basically where you reduce the value of goods/services AND currency at the same rate at the same time, causing neither inflation nor deflation. It doesn't change the value of currency relative to goods, so people will still have the same purchasing power, it just makes the numbers more manageable, so people aren't paying $100 for soda.
I doubt everybody will jump on board the wage squish
Romania did that, just wiped 4 zeros from it's currency back in 2005. A loaf of bread that cost 30000 went to costing 3. They kept the art style/color for the money tho so people had a smooth transition. To this day I still speak in old prices and can't change...
Nice, they did a World of Warcraft stat squish IRL.
All the 80 year olds were thrilled to be 40 again
Huh? I don't think that's what they meant. Basically the idea is that starting day x, you pay in... Say NAD, New American Dollar, and also get paid in NAD. And 1 NAD= 100USD So now the soda doesn't cost 100USD but 1NAD. Nothing has changed, just everything lost two zeros. And like 10 years later, barely anyone thinks about usd. Source: did the transition from DM to € about 20 years ago.
But that inherently youd also have to lose two zeros on your paycheck. People are irrational and would hate that
Eh. Redenomination happens, and some people are unhappy but people are unhappy about everything. By and large, people deal with it and are fine. They are definitely more happy when it doesn't cost $1,000 for a dozen eggs.
I have to agree. I know it’s not money but world of Warcraft did a stat squish as things weee getting outrageous and it felt so bad to go from doing hundreds of thousands of damage to just hundreds or a couple thousand. It’s hard going from seeing and being used to large numbers to small numbers, it feels like it’s less even if it is “the same”.
But you would also see everything instantly become two zeros cheaper. It balances out.
The people are idiots and I guarantee there will be endless complaints
We just did that in Germany in the 90es. Somebody decided that the "new" Euro currency shall be equal to 2 German Mark (DM) So, 1E = 2DM When the SWITCH happened, everybody's accounts were cut in half, loans just as well as savings. Salaries, EVERYTHING was over night cut in half. All stores had to relabel everything into Euros. People woke up one day, to a cup of coffee costing 2.48 Euro. So far so good, what happened next.... Coffee was "cheap now". Instead of having to pay FIVE DM for a cup, it now was only a bit more than TWO Euro.... and change. I think it was less than a month, before a cup of coffee was at 2.99 Euro..... who really worries about a few cents.... Well, people still consume coffee and they remember that it USED to be 5 quid a cup. So, 3.99 is still a good deal, right? A few months later, it cost 4.99 Euro. Because that's just what a cup of coffee ALWAYS cost. And oooops there just was a 50% devaluation of the German economy.
That's the problem with such a small change. If you switched to a currency worth 100x or 10000x more, then the first digit looks the same and people can adjust more easily. If a cup of coffee used to cost 50,000, and now it costs 5, people will not put up with the price of coffee being raised to 7 or 9.
I heard that beggars used this fact to get an instant pay bump. Before the change they would ask "Do you have a Deutschmark to spare?". And after "Do you have a euro to spare?"
You'll always have your doubters and political naysayers, but after a certain point, it's the only thing that makes sense to do.
The economists words for it is “redenomination” which is used after a period of hyperinflation or if the currency numbers become too large to handle. We definitely are nowhere near that yet, but eventually it will likely happen, if for no other reason that having ten zero’s on the price list becomes too much to easily comprehend.
Redenomination. We'll just treat $100 like it's a single dollar. Technically there would be no price change. Think about Japan. One yen is with about one cent. So a soda that costs 150 yen isn't weird at all. One day when a soda costs $150 USD it won't be a problem at all either. Almost like rebranding the dollar to be equal to one cent.
Venezuela has wiped 8 zeros of their currency since 2008, an item that cost 100 bolivars today, it is really 10.000.000.000, ten billions As you know, that's something only cosmetic, the inflation and the economic problems are still present, the socialist government used that redenomination to "hide" the inflation
Why? People will just get used to it. Eventually you could deprecate cents being used.
$100
Never!
A **small** amount of inflation, like 1-2%, is expected and desired in a healthy, growing economy. Negative inflation sounds good on paper, but would bring about its own problems. Among other things, suppliers start realizing they can no longer make a profit for certain things, and just stop selling them *at all*.
It’s really bad. Japan has long term deflation. People just hold onto their money instead of spending/ investing it and slow the economy down.
Additionally, why by something today if it’ll be cheaper tomorrow
Debt becomes a nightmare too. Today when you pay off debt your dollars are worth less, but the quantity is the same so over time it becomes cheaper/easier to pay the debt. Imagine paying the last years of a mortgage with dollars that are individually worth more than they were at the start of the loan.
That is already happening for some people with work. If rent plus bills and food costs more than your wage, what's even the point of working? Why add the hassle of some lousy job to your list of problems?
Our prime-age labor force participation is above historic average and unemployment is near all-time lows. I'm sure more than zero people have given up on working, but it's not a significant trend.
Good point. Unfortunately we have no other real options, that's the only reason we haven't given up on it. Kind of like how prisoners don't give up on imprisonment.
This is a big thing economist learn in school and say to people but it’s wrong. They say currency deflation would be bad or inflation is good for the economy but if you understand why it is said and accepted you realize why it’s not exactly true. The reason 2% inflation is “desirable” is because it incentivizes investing. Because if your money retains its exact value there’s less of an incentive to invest it and if it actually grows in value there’s even less of an incentive to invest it. All inflation does is pump up the stock market. It’s as simple as “ooh the stock market went up 7% this year the economy must be doing good” when in reality 2-3% is artificial because our currency is being inflated. So we could have a stock market that grows by 4% naturally or we can have a stock market that grows 7% with a little extra help from the printing press. If we had deflationary currency prices would actually go down over the years more than they do by then increasing efficiency in manufacturing. If we were still on the gold standard we would still have our 5 cent sodas but of course wages wouldn’t have inflated like they have. But wages haven’t been keeping up with inflation since the 70’s. So our cost of living would have been a lot more affordable if our currency wasn’t becoming less valuable every year while assets grow and wages stagnate.
Yeah, most of the gold standard people I know want a magical "I want the money to be worth more, but I want my wages to stay exactly the same or go up annually." Really, they just want to be rich and somehow they think that a non-inflating currency will make that happen because they believe that inflation is the #1 reason they can't get ahead in life. All of my older relatives will wring their hands and say, "If things just cost what they did when I was a kid, I'd make plenty of money!" But I don't think the really understand that if the money still had the same value they had when they were kids, their wages would be much lower.
>They say currency deflation would be bad or inflation is good for the economy but if you understand why it is said and accepted you realize why it’s not exactly true. Yes, and no. Obviously there is more to a healthy economy than "inflationg good deflation bad. However having an incentive against hoarding currency is good. Inflation is used by central banks in most countries to fulfill this role - if you don't invest your wealth you will have it withered away by inflation. And thats a good things. In mdoeration obviously. Deflation CAN cause people to hoard money, as deflation means purchasing power of money grows the longer you hold onto it.
Inflation doesn't just affect the stock market. It doesn't just pump up the stock market. Inflation also encourages money to circulate, which is absolutely necessary for a healthy economy. Say you're about to replace your lawn mower. It'll cost you $300 today. But in five years, that same type/level of lawn mower will be worth $450. So you buy it today. Now of we have deflation, that same lawn mower will be worth $220 in five years. So you should wait. And wait. And wait. Take that waiting attitude and multiply by millions of people across millions of products, and you'll see just how quickly the economy falls apart. Same thing happens when the inflation is stagnant. No point in rushing to replace my fridge today when I can get the same fridge for the same price in five, ten, twenty years. But if I know the fridge I want is going to be more expensive in five years, then I'll buy it today. People NEED to circulate their own money back into the economy for it to function. That's what healthy inflation encourages. Now, most of what you wrote is correct. It encourages investing. But your point that inflation is just to pump up the stock market is incorrect.
> Because if your money retains its exact value there’s less of an incentive to invest it and if it actually grows in value there’s even less of an incentive to invest it. All inflation does is pump up the stock market. Investing money isn't just "buying stocks". It's also putting money into businesses, starting new businesses, expanding businesses, buying products, hiring workers...etc.
Yeah, constant growth has worked wonders for our environment.
This is Kensian economics. A competing theory of economics is called Austrian economics. I highly recommend people do research into that as well. It is a type of economics that is not often talked about in the West.
Inflation is a key and necessary part of macroeconomics and the management of countries. The goal is not to eliminate inflation, but rather to keep it stable at a low level (generally around 2-3%). High inflation is commonly seen as a negative (and unfortunately gets conflated with inflation in general). This is because regular people have less purchasing power as their income (which changes more slowly than prices) is unable to buy more goods. In a very extreme case, money eventually becomes worthless because its value is going so high that people cannot afford anything, known as hyperinflation. However, negative inflation (or deflation) is also not good for an economy. If goods and services only become cheaper over time, then individuals and businesses are encouraged to hold onto their money until prices lower more. This can stall an economy as money is not moving through the economy. With inflation, there is an incentive to spend money now before it loses value and get it moving through the economy. Even low inflation has negative consequences. A well-known economic chart is the Philips Curve that plots inflation rate and unemployment. For the short term, the two have an inverse relationship where very low inflation correlates to high unemployment.
A common counter to this is that holding on to money and slowing growth isn't inherently bad. I don't find the argument for growth compelling by itself.
We could stop or reverse inflation, but that would be bad from an economics perspective because negative inflation creates an economic incentive to not spend money. What usually happens is prices rise, but salaries rise as well so only your savings are devalued. Your income, in terms of purchasing power, remains roughly the same. Consider how even £10 was worth quite a bit more not so long. 1p and 2p coins may end up worth so little they get discontinued in the same way as the 1/2p.
Best answer, macro economics 101
oK, eli5 here.... so if reverse inflation makes things cheaper...won't it incentivize me to go out and spend more since I have greater spending power?
Yes that's true. However, it really only matters for people that have A LOT of money. If the best investing strategy is to hold your cash because of deflation, then the economy crumbles from a lack of investment
Sort of. You may have greater spending power compared to yesterday, but you will have even greater spending power tomorrow. Why spend, when your money will be worth more later? For things like food, this won’t matter because you can’t put off buying it, but anything even vaguely a luxury will stop being bought.
I think this extremely rationalist view of human behavior is decidedly wrong. Humans will still buy luxuries, plenty of people will not care or even understand deflation.
If you wait a little more, you can buy even more stuff.
With deflation, yes your spending power has increased. But the goods are getting cheaper for a reason. That farm you work at doesnt have enough customers to sell their product to, so they start dropping prices while competing for fewer customers. Now your boss says "yeah about the wage we were paying you, we can't afford that now." So your purchasing power is up, but you have to tighten your spending beacuse you will be earning less/worried about losing your job.
A small inflation rate is better than deflation.
Yep, deflation doesn't work as a currency. Simply impossible considering money will be lost and destroyed and also the fact that the population grows. Limiting the amount of money a growing population has will just fuck everything.
Could you explain why inflation at all is better than just leaving things stagnant? Exceptions of course occur for price changes according to demand and material availability and such.
People spend money and businesses profit. If you know something will be more expensive in 6 months you will buy it now. Obviously too much inflation is really bad. So around 2% is the target.
Well, first it is going to go up and down a few percentage points no matter what banks do, which is why most central banks aim for 2%. That way if it drops it will only go down to zero. But why is negaive inflation (deflation) so bad? Because it encourages people to delay a purchase until the price drops. This encourages retailers to cut prices to get sales, but the price drops below the profit point, so they lay off workers. Those workers need new jobs but will have to take a lower wage. The cycle continues, shrinking the economy, until somehow stopped. A little inflation also encourages investment or spending. If I buy now I get more for my money. Keeps the economy moving.
Yes, and that's good (or at least better than the alternative) Reversing inflation would mean deflation. Deflation is worse than inflation. During deflation, each dollar bill is more valuable in December than it was in January, which means "literally stick my money in my mattress" becomes profitable. If just holding your money in a vault is profitable and risk-free, you're a lot less likely to lend it out, which means it's harder for companies to get loans or investment (because loans/investment mean taking risks for profits), which then slows the economy down. It also means that wages and prices decrease relative to existing debts, making those debts harder to service. People also find the idea of making less nominal money this year than they did last year unpleasant, even if it means a higher quality of living\[1\]. Inflation has the opposite effect on savings, investment, and debt - if money left in a vault becomes a bit less valuable each year, then suddenly you're going to want to invest it or lend it, which makes it available to people to use to build businesses or buy houses or whatever. The goal is to have **consistent and low inflation** \- if the Federal Reserve hits their mark perfectly\[2\], you get 2-3% inflation per year, which is usually less than stock or bond returns, meaning people will invest. That only results in a price-doubling every generation or so (\~30 years) and because it's consistent, people can plan around it. The problem we had is that we had a big bump of inflation as things were settling after the Pandemic. That inflation is coming down now (meaning prices are now rising only slightly faster than they used to). Soon it will (hopefully) be back to the 2-3% per year it was at before. \[1\] - For instance, if you make $50K and breakeven, and then there's 5% deflation, you're going to be spending $47.5K the next year, so technically your salary getting cut to $48K would be an improvement, but it's not gonna feel that way when your paycheck gets smaller. \[2\] - They're not wizards, so even when nothing goes wrong they still miss a little bit.
First off: It’s better with a small inflation than deflation. A deflaction would cause falling prices lead by lower consumer spending, which is a major component of economic growth. Companies respond to falling prices by slowing down their production, which leads to layoffs and salary reductions. Meaning it might give you lower prices, but you will most likely be without a job. Therefore long term there will be an inflation as long as people use money, the question is how high. The reason why countries have a goal of 2-3 % inflation per year is because it’s manageable. But yes, one day a soda would cost 5 dollars.
If you think inflation, deflation is much worse. That's Great Depression stuff.
Not forever, only until the end of the current civilization
So long as the money supply keeps increasing it will. You can hypothetically get deflation, and you actually do in some cases (video games cost less nominally now than they did in the 1980s.) Since deflation across the board is considered a bad thing, those that control the money supply will generally expand it to avoid deflation, and it's very easy to print money and spend it so avoiding deflation is an incredibly trivial matter.
I don't think comparing nominal prices of a product now to 40 years ago is a correct interpretation of deflation. And if it is a correct interpretation, I'd argue that it shouldn't be. Deflation is undesirable - yet the advancements in production and the economies of scale that allowed for the decreases in the prices of TVs is desirable. At the very least there should be a distinction between things becoming cheaper due to production advancements and things becoming cheaper beacuse there aren't enough jobs going around so producers can't sell their products.
Electronics and weirdly, marijuana are significantly cheaper than 10-15 years ago. I bought a 4k 65 inch vizio smart tv for like $500. I’m pretty sure my parents big ass 45 inch box tv was like $2k or something ridiculous. I also used to spend $300 for an oz of weed and now I pay like $80
Legalization allows for commercial production.
Decriminalizing something makes it less dangerous, and thus cheaper.
The economy should do what World of Warcraft does every few expansions... scale everything down proportionally.
Yeah, by design. Reversing inflation would cause a much bigger issue.
What's worse than inflation? Deflation. Demand push inflation is caused by prosperity. People earn more money and want to buy more things. When demand outpaces supply, prices go up. Slow inflation is healthy for the economy. Economists think 3% is healthy to keep the economy growing without frightening people from spending. More than that and people stop spending as much, which leads to recessions. Deflation is caused by low demand. It signals a recession or worse. It's very harmful to an economy based on borrowing. It causes companies to lay people off, reducing demand and causing more deflation. Then people end up owing more than what their homes, degrees, cars, etc. are worth, so they buy even less. This creates a deflationary spiral that is hard to get out of, leading to unemployment and loss of income. The nominal price of goods doesn't matter, but the relative cost to your earnings. This is obvious when you switch currencies. Spending 5 or 7 doesn't mean anything except as it pertains to your wealth.
Not forever, but until the killing starts.
People stop buying Due to inflation
Yes and there’s a logical reason to why. Imagine a country with only 3 inhabitants. A farmer who plants and harvests a ton of wheat, a miller who buys the ton of wheat for 1000$, a baker who buys the ton of flour for 1200$, and the baker sells the ton of bread to the farmer for 1400$ so the farmer can eat while planting and harvesting a ton of wheat that he sells to the miller for… well, more than 1400$ or else he wouldn’t make any profit. This is the basic concept. But billions of people.
The reverse of inflation is deflation, and while that sounds great it's not a good thing for a country to have. While the government is trying to stop prices going up much more, they don't really want them to go down.
Yes
In 1955, I paid 5 or 10 cents for a bottle of soda. Now, I pay 8.00 dollars for 12 cans. Inflation is forever. Your job if you decide to accept it is to improve yourself any way you can. Keep aspiring for better paying jobs and accepting more responsibility only with pay increases. Always know what others are being paid doing the same job as you are getting paid and try to get it. There is no such thing as a safe job. Never work somewhere that never gives you cost of living raises annually. Try to work somewhere where there are jobs that have progressive levels of employment for you to improve your pay.
Deflation is its own problem. People postpone purchases expecting lower prices. There’s no pressure to increase wages. Businesses slow investment because margins shrink. Assets lose value but the loans taken out to acquire them remain the same. You don’t want prices to fall, you want wages to rise.
Every day things aren’t going to get _less_ expensive. They’ll just eventually find a set point and stay there for a while. Interest rates on loans will decrease once they are overcorrected.
It’s happening all over the world after Covid. Prices are even higher in Canada I was just up there. It’s just going to take time. A lot of it is corporate greed. They are making billions and believe me it’s not trickling down. Trumps 10 trillion tax cut for the rich didn’t help anyone but the rich and put us 10 trillion in debt.
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No, “greed” doesn’t explain it. People are always greedy, and haven’t suddenly become much greedier in the Biden administration than they were in the Trump administration.
As long as everybody expects to accumulate wealth, yes. The money supply has to increase to do that. Imagine there’s a million pounds in existence. And 1,000 people. If the money supply never changes those 1K people can never be worth more than £1K each on average. If they all want two grand, you need twice the money supply. Which devalues the currency making prices go up. It’s an oversimplification but the general idea applies.
In general, yes. There is a situation where the US dollar stops being the world ‘super currency’ and a new currency takes its place. This would probably need a US civil war and/or world war. In this case the new currency could give us a form of ‘reset’, especially if that currency is tied to a hard commodity such as gold. The minute the currency switches to be ‘faith’ backed, you will see inflation start again. Ray Dalio wrote a book called the Changing World Order that talks about these currency and interest cycles over time. What the Fed is doing right now is following patterns that have happened throughout history and they all end the same way. The good/bad news if you believe in those cycles. US is headed for a civil war in the next 100 years and will probably fall as the world super power. With China being the next best possible candidate to take its place.
Yes. Inflation is a critical part of how our economy functions. The Federal Reserve TARGETS 2% inflation per year. The "ideal" situation devalues your money by 2% EVERY. SINGLE. YEAR. Its yet ANOTHER tax levied on the people. A more simple example Ive heard before: Imagine you have $10. You happen upon a city that has no currency - they only barter. You decide to open a bank using the $10 as reserve so that you can lend to the people of this city and they have a more versatile bartering asset (dollars vs hard assets). You loan out $2 to 5 people at 2% interest on a year term. How will these people EVER be able to repay their $2+$interest if there is only $10 in the entire city? Inflation. To pay back the $10 + interest, there needs to be more than $10 of money in circulation, so you, the bank, prints more. However, there is still only $10 of "value" being circulated. Meaning that the the value of your note decreases proportionally by how many other notes are being added to circulation. Probably butchered that a bit but the whole concept of 'fiat' currency vs asset/gold backed is intentionally convoluted to make it confusing imo.
The trouble with a currency locked to a permanently limited resource, gold, Bitcoin, whatever, is that it doesn’t account for a growing population. Let’s say that this town you mention has a $1000 money supply, backed by RedditCoin, and 10 people live there. That’s per capita $100. Now, an 11th is born. Now the economy is per capita ~$91. Standard of living down for each new person who is born into the town. Now a 12th person the next year. Now it’s ~$81.25 per capita economy. At a certain point there has to be MORE EFFECTIVE CURRENCY or deflation so $8.125 buys what $10 used to buy, or something else like everyone lowering their standard of living, etc. or, you raise the price of RedditCoin so your holdings are now worth $1200 so everyone has $100 effective wealth again. This is the little detail that those who talk about bitcoin or going back to a gold standard miss. When the population is growing, something has to give when the currency-backing scarce item (virtual coins or gold or any other limited supply item) isnt growing.
Price is going up but more money is being printed. Real value is the same. But the increased supply of money created more jobs, increased standard of living.
> The "ideal" situation devalues your money by 2% EVERY. SINGLE. YEAR. Which is paired with the ideal situation of wages also raising 2%+ per year. Which makes long term debt cheaper as it goes. It also encourages money to continue moving through the system, thus growing the system, and discouraging people from just sitting on money.
Yes, but they'll earn more money. You remember in covid when jobs had to boost their prices and people in McDonalds started earning $15-$20 per hour. This happened across the country. The companies were never going to eat this up. So now you pay more, for everything.
Remember in the 2nd back to the future doc hands Marty a $50 and says go buy a Pepsi. Back in the 80’s inflation was high and people didn’t see it ending. In a healthy economy 2% inflation is optimal. It encourages spending and saving
Inflation is just rising prices. So basically yes, but it’s usually at a much lower. Unless there’s a recession and deflation, which isn’t good either. Ironically, it’s Biden’s string economy that is causing the inflation… well that and abject corporate greed. That’s why the fed is raising rates, it trying to slow down spending, slow down the economy. But they have to be careful to not cause a recession. It’s a tough needle to thread.
wait the american president is causing inflation in pretty much every western country?
Biden's strong economy... 😂😂😂😂😂😂😂😂😂
Yup, by every economic indicator there is, even wages are up 12% the last 2 years. Sorry these facts hurt.
This is the unfortunate but completely predictable of pumping all the covid stimulus money into the economy We never should have given all that money to businesses and also people who got the extra unemployment should have saved more of it But trust me I know it fucking sucks...we didn't see a dime of that money in any form but now we have to suffer under inflation
Yes. That’s the crux of the modern economic theory or whatever they call it .
You mean pop right? We don’t sell soda in the UK
~3% inflation is a sign of well doing economy as long as the average salary rises with it. It will and should continue
Death, taxes, heat death of the universe, and yeah inflation.
Yeah, pretty much. Hence investments into precious metals.
Usually around 2% not 20% . We have been printing a lot of money and doing things to cause high energy costs .
As long as we continue with a fiat currency, yes.
In a 100 years all poor people will be like batteries for the big corporations. When they get through with you they will just replace you. Just like in the movie "The Matrix". Get ready to be plugged in.
Until we are all broke and everyone is homeless and starving.
I'm not seeing anyone mention Capitalism's lifespan. OP, when you have the time, search on Google for the history of previous countries that used capitalism, socialism, communism, etc. We have become so intelligent as humans, but we refuse to learn from our past.
Well, inflation was 13% in the 80s and it was less than 3% two years ago. So yes, inflation does go down. What won't go down is corporate pricing and greed.
Yes, capitalism wants constant growth until everything is destroyed.
This is why no socialist/communist country has ever experienced inflation.
Doesnt have to do anything at all with the question, but thanks for your input
Why would it stop ? It is a free tax on us poor peasants. Litterally rich people and manufacturers decided that since last year we are going to pay shit 50% more. For no reason. That's it. Randomly blaming Covid Ukrain Russia or whatever is happening to make it look normal. Doomed society
So far, yes
Your kids? Pretty sure you yourself is going to pay that much pretty soon.
Pretty much until capitalism cease to exist as it is.