Replying to Avatar Delta Charlie

100 years of loss.

Inflation is not higher prices.

Inflation is an expansion of the currency supply. Higher prices )declining purchasing power) are the result.

Over the course of a century, the dollar has witnessed a gradual erosion of its purchasing power. Inflation, driven by increased money supply, is a key culprit. As more dollars flood the market, each individual unit becomes less valuable, necessitating larger sums to buy goods and services. The dollar's reserve currency status has allowed the U.S. to amass debt, which, while manageable in the short term, poses long-term risks to its value.

All these factors combined illustrate how the dollar has experienced a gradual diminishment in its ability to buy the same basket of goods and services over a century.

Inflation is fundamentally an expansion of a nation's currency supply. It occurs when central banks increase the money supply, leading to more dollars (or any other currency) chasing the same amount of goods and services. Higher prices, the common consequence of inflation, are a result of this surplus money in circulation, as it diminishes the purchasing power of each unit, causing prices to rise as a natural response to increased demand relative to supply.

#federalreserve #government #inflation #bitcoin

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MUHTEŞEM 2y ago

🧡

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