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Inflation?
(i.ibb.co)
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this post was submitted on 26 Aug 2024
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I think the bigger issue is the Federal Reserve.
I don't think the federal reserve is active outside the US. Also printing money was the cause of inflation when gold was backing the money, now the worth of money is only governed by what you can buy with it. Like you can double the amount in circulation but if no one raises prices there would be no inflation.
FED policies affect every currency on this planet as they are all backed by the usd.. the consumer price index was designed to under report inflation. The basket would be CHEAPER every year because of improvements in production if there was no inflation.
There are a handful of currencies backed by USD but most are not. I only know of Belize dollar, the Hong Kong dollar and the Dirham as backed by USD, as far as I know those are the only ones.
Do you think stores look at the inflation and raise their prices accordingly or do they raise their prices and inflation is calculated based on that? One of those is correct.
Bermudian dollar as well
Stores don’t look at inflation, inflation makes the stuff they sell more expensive to buy, so they have to sell it for more money or make losses.
Fed policies like interest rates directly affect almost all countries because they have USD debt.
Oh wow, stores must suddenly be buying their materials much cheaper recently when they realized they need to charge less, right?
Or did they just realize the market won't bear what they're charging, so they're lowing their prices to get more business and lower the margin on their sales?
Hint, it's the second one. Because stores are raising prices to increase profits, not to make up for increased ingredient costs.
Go look up net profit margins of retailers, they are going sideways.
Thats because of how they define profits.
Every company wants ALL the money.
They make enough to pay all their bills and expand reasonably.
They are not happy with that.
Its always more more more.
Obviously, because the money is always worth less less less.
And yet they can afford to advertise they're dropping their prices 🤔
So what makes the stuff stores buy more expensive? Like you can create a chain of price raising as far as you want but ultimately it's just someone deciding to raise prices and that creating inflation.
Again, only a handful of countries own US debt and I don't even know how US debt interest rates are going to connect to inflation in other countries. Like China and Japan are the largest debt holders and their inflation is vastly different.
Nobody said US debt, it's USD debt, this is basic international economics knowledge.
Inflation is the loss of purchasing power of money, not somebody raising prices. Inflating the money supply leads to loss of purchasing power.
Inflating money only loses purchasing power if it's tied to the value of something else as I originally said. That was literally my original point.
And what do you mean by USD debt?
Money is always tied to the value of things, so according to you inflating the money supply always leads to money losing purchasing power.
Debt denominated in USD