Replying to Avatar Jac

So I’ve been reading about inflation. While I know that printing new fiat currency fuels inflation, I’m not sure exactly why. Let’s say I have ten people and ten thousand distributed entirely between them, but not equally because that isn’t the way the world works. They participate in an economy self contained amongst them, and I show up with an extra 10% of the total economy and start to participate by lending this money to the ten people in a discriminating way. What happens to their purchasing power and why?
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mark tyler 2y ago

The ratio of money units to goods / services changes in favor of the people who get the new units. The result after it stabilizes is that people who didn’t get the new units can’t buy as much as they used to be able to buy with the same amount of money.

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mark tyler 2y ago

The people who got the new units have the same problem, but they have more units. And because they have absorbed the loss from those who didn’t get the new stuff, their total buying power also went up (not just money unit count)

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Jac 2y ago

Yep, exactly. Bitcoin fixes this. 😁 #bitcoin

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Jac 2y ago

This is why printed money given to war efforts, which distills to the wealthiest 1% results in currency inflation with increasing consequence the further you are away from the apex of wealth. That makes sense. Thank you.