What is inflation and what causes it?

Yes, it does. I was talking about different causes for inflation, and you said there us only one cause, and everything else is government obfuscation, but the other causes are not a government fairytale. Its economics. Demand Pull and Cost Push inflation are actual economic terms.

 

You fall prey to the obfuscation. That is to combine expansion of the money supply and prices under a single umbrella. These two things have different origins, different effects and different solutions. Government does what it can to deflect from money supply expansion with the obfuscation. Obviously it works.

 

No, the issue of inflation doesn't obfuscate me at all. Its pretty straight forward stuff. You have it upside down thought, thinking of only one umbrella. I tried to explain there are many umbrellas, but I think there is no point in repeating stuff, especially since you see everything as some kind of government conspiracy

 

Sorry, the government and economics community have it upside down. There is no conspiracy about the expansion of the money supply. The dollar is worth less than 10% of its value when I was a kid. It is very very real. Nothing conspiratorial or theoretical about it. Sorry.

So can you provide a list of the various umbrellas? I would love to debate them with you.

 

I didn't say that. Obviously you did not understand what I said, and since I think the misunderstanding is deliberate, there is no point in continuing.

I did (several time), but this has turned into a fruitless discussion, so I am moving on.

 

You nailed it. We call it inflation, but it's really just a shortened form of "intlation of the money supply", which is how the term inflation came about.

And you are correct in the relationship between the quantity of money and the price of money. It's simple supply and demand.

And for those who doubt that inflation is caused *only* by an increase in the supply of money, they should try a thought experiment and try to describe whether or how inflation could exist in a non-monetary economy.

Maybe start with a very simple economy where there is no money and there are two goods, say apples and bananas. Now let's see if the price of both apples and bananas can rise simultaneously.

 

Inflation without Increase in Money Supply?
Is it possible to have an increase in general price levels without any changes to the amount of money in circulation or the velocity of circulation? Yes: if the amount of goods and services available to buy, decreases

 

Every single good decreases by the same amount? That's the scenario?

 

The scenario is what I have explained you on three different occasions.

 

Those secnarios were not a general (i.e. universal) rise in prices. They were price changes in different sectors.

 

They were examples of inflation, but whatever makes you happy. I have no interest in another iteration of repetitions.

 

Have you given any thought to how inflation might be able to be possible in a barter economy?

 

Incorrect use of the term inflation. You are describing the rule of supply and demand which affects prices, not the value of currency. Inflation historically is inflation of the money supply. The term has been corrupted to include prices for obvious reasons. Prices vary with the relationship of supply and demand. They are temporary. Inflation causes people to spend more money for everything they buy regardless of the prices and their temporary variable nature because their currency has less value.

Inflation is caused by expansion of the money supply. Government does that. Prices are caused in the economy by supply and demand. You can't fix inflation by changes in supply and demand. The FED and its interest rate hikes are a perfect current example. They don't work because they don't address true inflation. Only the government money supply can change it. The two things have been combined under the term inflation in recent years to deflect from governnment inflation of the money supply.

It is a semantic argument but yours is political while mine is economic. It is an important point for the reason that it hides true inflation which is the problem. Prices are just what they are depending on economic conditions. Government expands the money supply constantly and never reverses for obvious reasons. That makes true inflation permanent. As I said before the dollar is worth about 10% today of what it was worth when I was a youngster. I think it is important for you and everyone else to understand the difference between inflation and supply/demand. The economists should be doing that but they can't agree on anything.

 

Sorry I missed it. Ta ta.

 

When chicken supply is restricted and value goes up and you still want chicken, you have to make up for the difference by other means, like agreeing to work for a day. Before it was 1 fish, and now its 1 fish and 1 day of labor. So, yes, you experienced demand pull price inflation. People are free to call it whatever they like, and insist inflation relates to money supply and nothing else, but in economics there are multiple types of inflation. There is no point in playing word games.

Bu-bue