Inflation - a light read over xmas

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Let me use my memory.

Yes, inflation can be due to an excess of money. But, in this case, it does not always imply increase of the prices of goods.

For years, the increase of the price of share and the growth of stock exchange index was pure inflation, without any effect on consumers goods prices.

The excess of money was trusted by capitalists and they had to use the money. They invested in stocks and in real estates. but the increase of the prices was not reflecting any true growth of economy. Cheap money put on the market by the central banks fed that.

In fact a crash of the stock exchanges is overdue and has only be prevented by the influx of cheap money injected by the central banks.

The COVID crisis has broken the process of production of goods. As the system is very frail in our global economy, everything is lacking. Microchips cannot be produced as the necessary goods are not available and so.

And the final buyers, us have money. It means they can and want to buy, in some limits. Prices can increase, up to some limits.

In fact, inflation is not a disaster as long as it is kept in some limits. It is a disaster for renters and investors in monetary goods as it destroy their capital,

Limited, it is very good for states and private persons.

In 1947, states were in debt at levels unthinkable today. Inflation killed the debt. And as long as the wages increase, the workers are happy with inflation. When you borrow at a fixed rate, as long as the inflation rate exceeds the interest rate, you are a winner. After WWII, many people bought real estates up to the sixties and the beginning of the seventies and paid easily.

Inflation, in the common sense, has become the devil with the triumph of financial capitalism in the Reagan-thatcher years.

And the central banks have no good choice.

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It’s all about greed, nothing but greed.

No we don’t. At least I don’t. I see all these people at work spend anywhere from $400 to $1000 on crap and all I spent for gifts was $80 ($20/person or less, including my grandson). I’m glad I have one son who is a minimalist and hates it when I buy anything more than a piece of chocolate for him for Xmas or I’d be broke. My husband isn’t greedy either and for my mother, greed is a sin. So there you have it. I get away easy and don’t have to succumb to the greed of the season or even feed Corporate greed.

I’m buried in plastic and empty boxes right now, and the kids are playing with the old toys we always have in the house. It’s more for the adults I think, than it is for the kids. They like opening them, but I don’t think they really care

I don’t know. I was more excited about Xmas day as a child than I am now. There was a magic in the air as child. Now, it’s just another day, even though I get with in-laws and have dinner. That’s basically it for the day.

What I mean is, the adults get a kick out of the kid’s reaction to presents. Also, it’s an easy way to fufill their need to give them something, as opposed to spending time with them.

Yes, watching the babies play with the wrapping and boxes from your $$$ present!

a friend of mine works for a discount company that sells everything needed for the home and garden.

This company has experienced growth rates of 50% in recent years, it has just built a head office for 250 people and will recruit 80.

My friend tells me that they manufacture in China for the most part, like their competitors.

However, they are going to increase all their prices by 50%, and crossing their fingers. Indeed, the purchase price of imported products has doubled. The cost of transporting a container has gone from $ 400 to $ 5,000.

In addition, the products do not arrive. Chinese companies are limited in their working hours, commodity prices have skyrocketed and ports are saturated.

It’s gotten really bad. I’m beginning to think we should throw out the current system and start over with something different. I said that to someone (an older woman) and they freaked out, not wanting such a thing because it would fulfill prophecy. I told her, “That’s a whole other subject.” I get sick of religious nuts who think change is bad, when it’s not.