Do we agree that tariffs cause inflation ???
#ask #askstr #asknostr
Discussion
It should raise prices by creating supply friction if demand stays constant. Not sure how these tariffs would affect money supply to cause inflation.
It depends on how much the citizens can withstand the blow
Inflation is caused when the money supply is increased.
Taxation will cause a rise in the price of things, but not because of inflation, but because the market will be more inefficient.
But I am not an economist... this is just how I understand these phenomena.
No
Printing money causes inflation, the people who print money to cover their expenses might be less harmful if they used tariffs instead
The idea this would somehow cause inflation makes no sense
It is no nonsense that sustained price increases over time lead to inflation
Sure if you print money to pay for them
But how are tariffs supposed to exacerbate or replace the hydrocarbon shortages causing the only sustained price increases ever in history?
If they don't print money, you pay for it with higher prices and consequently you are poorer... hence three possible paths: inflation, recession or a mix of both
That's an immediate change, not a continued sustained one
On the contrary, the more time passes, the more you will feel it if it continues over time (even more so for those with less purchasing power), unless we normalize it... now is when it will not be felt because the country, even though it is bad, has a strong economy to endure for a while
No, there's no reason the tariffs would have to keep increasing after reaching the point where they can cover current expenses. The authoritarians in charge right now have insane expenses, the expense ratio doesn't need to get worse
Consumer price inflation, not monetary inflation.
Tariffs are paid by companies and passed on to consumers through higher prices from the merchants.
Lowering IR will mean cheaper loans, credits = new money creation = monetary inflation.
I may be totally wrong
The US has a strong economy that would have been better for it, but if it continues over time, it will end up printing more money. It's the quick fix for the problem the state created