Why can’t prices just stay the same?

Рет қаралды 1,172,665

Ай бұрын

If high inflation hurts just about everyone, why can’t we have no inflation?
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Over the past few years, most of the world has experienced some pretty intense inflation, with prices rising as much as 10 percent in a single year. In 2024, even though inflation rates have fallen to more manageable levels, prices are still way up and are very unlikely to come down. Which, understandably, continues to be a source of major stress for people all over the world. So why can’t prices just stay the same?
As a consumer, steady prices and zero inflation seems like the ideal: You want your purchasing power to stay the same and for your dollar today to buy you exactly the same amount as your dollar tomorrow. But even in times of global economic health and stability, governments and their central banks actively avoid letting inflation get too low. That’s because 0 percent inflation might actually end up doing more harm than good.
In this video, we take a look at the reasons why.
Sources and further reading:
To take a closer look at inflation and interest rates in the US, check out FRED (the Federal Reserve’s economic data repository): fred.stlouisfed.org/
You can read more about inflation targets here: www.imf.org/external/pubs/ft/...
And you can see more of Rakeen’s work here: groundworkcollaborative.org/p...
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Пікірлер: 2 400

@A_francis 4 күн бұрын

The current economy is unnecessarily tougher for boomers/senior citizens, I’m used to just buying and holding assets which doesn’t seem applicable to the current rollercoaster market plus inflation is catching up with my portfolio. I’m really worried about survival after retirement.

@RickWatson-xu6gw 4 күн бұрын

Just buy and invest in Gold or other reliable stock , the government has failed us and we cant keep living like this.

@benitabussell5053 4 күн бұрын

Yes, gold is a great investment and a good bet against the devaluating dollar, been holding some for awhile now, I’m grateful my adviser’s moment by moment changes in the market are lightening quick, cos who know how much losses I would’ve had by now.

@A_francis 4 күн бұрын

I envy you, who is this investment adviser you work with, I’m intrigued and I could use some quality guidance

@benitabussell5053 4 күн бұрын

*Sharon Lynne Hart* is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.

@RK-cj4oc 3 күн бұрын

Go away bot.

@Linkous12 Ай бұрын

"Companies make more money, which means more people have jobs." Are you sure about that?

@ryen7512 Ай бұрын

classic trickle-down economics scam

@facundogimenez1679 Ай бұрын

@@ryen7512 until people stop buying to the big ones... and they lower their prices, check the Argentina case.

@KerfaI Ай бұрын

Or "deflationary spirals can result in massive layoffs" pretty sure companies already do that anyway

@SomeGuy699 Ай бұрын

Yeah, pretty sure. Try working for a company where revenue is not growing, very soon you will find out they will not hire anyone or, even worse, they will layoff people. Furthermore, no increasing revenues also mean no increasing salaries (raises).

@gilsonsangulukaniphiri5018 Ай бұрын

What I'm sure of is that when companies make more money, they quickly look at ways of reducing costs to further maximize income. Labor cost gets their attention!

@person880 Ай бұрын

Inflation: 8%. Pay raise: 2.6%. Boss: "Congratulations on your pay raise!"

@gobblinal 24 күн бұрын

Yeah, we the biggest pay raise we've ever seen in decades. And it's still far below inflation. But apparently we're supposed to be grateful for this?

@hewitc 23 күн бұрын

The US economy had much worse inflation in the late 1970's--early 80's. In my experience with a big company raises were from 5-7%. Commercial banks paid 5% (fixed by law) interest so people put their cash in money market funds (something new) that paid 8-9%. Mortgages were well over 10% (for a 15-30 year fixed rate) with 1 or 2 % points upfront. Credit cards charged 20%. Today's economy looks pretty good to me.

@person880 23 күн бұрын

@@hewitc Young people could afford houses back then, especially with fewer credentials (like no university degree). Now, they can't. Today's economy looks not so good to me. Also, things are supposed to improve. Mortgage rates may have been higher, but home costs were much, much lower. Also, how often did homes have high HOA fees? When we add everything up, the economy looks good to you because you are old and saved money and don't seem to understand the struggles of the younger folks who never got the chances you did. Nobody forced you to get a credit card. If the rate didn't look good, you could just not use one. Housing, on the other hand, is something everyone needs, so when you are priced out of home ownership and have to rent forever, it's a little hard to say that things are good today. And don't even get me started on student loans....

@gorgolyt 22 күн бұрын

On average wage rises are now outpacing inflation. Let's not get distracted by facts though.

@gobblinal 22 күн бұрын

@@gorgolyt Only for CEOs. When was the last time minimum wage was increased?

@NicholasBall130 13 күн бұрын

Inflation, bank collapse, severe drought in the agricultural belt, recession, food shortages, diesel fuel and heating oil shortages, baby formula shortages, available automobile shortages and prices, the price of living place.

@StacieBMui 13 күн бұрын

It has never been simpler to grasp how to expand your wealth than it is right now, thanks to the availability of competent portfolio advisors that can help you experience and learn about a market with a wide range of assets. I think it's impossible to predict how changing dollar values will affect assets.

@StocksWolf752 13 күн бұрын

Yes, I have been in touch with a CFP ever since the outbreak. Today, investing in hot stocks is quite easy; the difficult part is deciding when to buy and sell. With an initial starting reserve of $80k, my adviser chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.

@cowell621 13 күн бұрын

Would you mind telling me how to contact this specific coach using their service? You seem to have the solution, as opposed to the rest of us.

@StocksWolf752 13 күн бұрын

Credits goes to "Sharon Lee Peoples" one of the finest portfolio managers in the field. She's widely recognized; you should take a look at her work.

@seanutarbuckle6457 4 күн бұрын

sounds like russian disinfo, how can things be bad when the most popular president ever is in charge of stuff? only magats talk like this.

@languagespotlight24 Ай бұрын

Why does economics always feel like an big international game of tightrope walking

@JZTechEngineering Ай бұрын

It is

@talavera180 Ай бұрын

its more like a tug of war.

@user-kh9bn6hi7q Ай бұрын

More like musical chairs.

@disgruntledwookie369 Ай бұрын

Because it is. I mean it reaaaally is.

@ozzyoz1495 Ай бұрын

Because they don't know what they're doing

@liamtheurchin5569 Ай бұрын

Inflation allows companies to cut your wages without cutting your wages.

@fuzzywhyyy9639 Ай бұрын

In the long run, nominal wages actually rise with inflation, increasing production costs and thereby reducing aggregate supply.This is how the economy self adjusts.

@faketruth7740 Ай бұрын

did you not watch the video? With the exception of COVID-19 2020-2023, wages historically have outpaced inflation. Wages are back to outpacing inflation again in 2024.

@dubiousName Ай бұрын

Every year in the last 5 years I got 3% raise but the inflation was higher, so today I can spend less than 5 years ago

@spe3dy744 Ай бұрын

@@fuzzywhyyy9639unfortunately the short-run can last very long though

@tommarney1561 Ай бұрын

"Inflation allows companies to cut wages without cutting wages" isn't necessarily a bad thing. Even in good times, some businesses do poorly because they're badly run, are overinvested in declining markets, or produce things that are losing their appeal to consumers. Inflation allows these companies to reduce the proportion of their income spent on wages while avoiding the morale shock of actually cutting wages. Sometimes this just delays these employers' inevitable collapse, but sometimes it gives them a chance to turn things around.

@woodykusaki9970 Ай бұрын

So when they say.. "inflation is a good thing".. You mean.. "it's a good thing for companies. We don't care about the average people"

@musicnlove911 25 күн бұрын

Companies are not lifeless entities. Companies are jobs, are taxes, are places of identity etc. If companies do well, society most likely does, too. Vice versa - not so much

@etr1us 25 күн бұрын

@@musicnlove911 JEff please relogin.

@Kristof-cl4df 25 күн бұрын

@@musicnlove911 but we don't do well, all the video said is good... in theory at least. In reality? not so much, companies don't put the profits back into the company and give more to the employees, they keep it for the ceo and shareholders. If the money actualy went back in to elevate the wages than yeah society would do good, but society isn't good right now and won't be for years to come

@nikoscobo3722 25 күн бұрын

And its good for the government because they can just spend more money

@user-dn5lr6lp4k 25 күн бұрын

@@musicnlove911Sadly, yes. Companies are (sort of) sentiment entities that have a simple goal - to make as much money as possible for the shareholders. The problem is simple: making more money doesn't always include making the lifes of people better. Actually, it's rarely the case.

@gablit3316 26 күн бұрын

the consumer mentality in the cycles is so wrong. you don't buy less when price is lowering. you buy less when you have less money.

@Shafiksz 14 күн бұрын

Its called expectancy of future prices. So if the consumers expect the future prices to keep decreasing, then of course the current demand would decrease

@gablit3316 14 күн бұрын

@@Shafiksz nah prices decrease because of demand, not thd other way

@Shafiksz 14 күн бұрын

@@gablit3316 you're using common sense to depict facts. That's why you're here

@gablit3316 14 күн бұрын

@@Shafiksz hey I think you don't know but... I'm the consumer

@Shafiksz 14 күн бұрын

@@gablit3316 which percentage of consumer behaviour do you even represent? Following common sense yes people should buy when the price is already low but most people tend to be greedy and when they see a trend that has been consistent for few days or weeks they tend to want to maximize or capitalize on the profits that they can make from the already lowered price and choose to wait longer

@KidFury27 Ай бұрын

You completely forgot about "parachute" pricing. This is where prices go up, the companies like the additional revenue and purposely slow the decline back to an acceptable amount. 🤬

@jennastephens1224 Ай бұрын

It's a relative of inflation price-gouging, where companies jack up the prices to increase their profit margin, and then lie to the public and say that they're just "passing on inflationary costs" while simultaneously reporting record profits

@pieterscribante3999 Ай бұрын

Yeah, sticky prices, too. High inflation begets high inflation, unfortunately, and it could be difficult to reduce sticky inflation. Thats why central banks need to act quickly and aggressively to reduce inflation.

@TJ-im5kp Ай бұрын

@@jennastephens1224well it’s all fractional. As inflation goes up more money exists. For companies to impress shareholders they need to outdo this rate of increase. Or at least increase. If they are increasing more than a 1:1 with inflation which is necessary to be investment grade over time, this must occur. Of course billionaires and ultra millionaires have lots of money in this but tens of trillions of dollars are held by regular people in pensions and retirement accounts. Those accounts rely on the companies to produce record profits nearly every year because they have to improve over time. It’s all cyclical. You can complain about one part of the system but you have to understand how changing it will affect the other parts. Companies do not lower prices because the economy is still inflating meaning more money is entering it. Unless deflation occurs prices will automatically never lower after periods of rise.

@designeedesigner6182 Ай бұрын

Their main concern is profit and if they actually lower prices too slowly then they will lose out on profit. The reason they do this is because inflation periods are uncertain, it's not the fault of the companies but of government and central banks.

@doujinflip Ай бұрын

Increases in wages and buying power never seems to “trickle down” nearly as fast as increases to prices, which seem to happen as fast as the companies can print the new stickers.

@MRFLOPPYmr Ай бұрын

We are getting this concept told for decades now. But does it really make sense? Do you buy a new laundry machine/smartphone/coffee because you fear that it will be more expensive next year? Would you visit restaurants less frequently, when their prices get cheaper, expecting that prices will fall even more next year???

@Hollywood041 Ай бұрын

You are not understanding the argument. That is why they have to keep explaining it to you for decades. This Simmons washing machine is $600, in two years it will be $400... correct. But a new washer that is the equivalent of where in the spectrum that Simmons one had been on it's release to the market, that equivalent, it is not $600, it is $650. Not the same exact item at different point in time. The same type of item, a mid-range, gadget w/ the bells and whistles customary to the development of like items.

@MRFLOPPYmr Ай бұрын

@@Hollywood041 please lern some grammar and spelling before you answer. I'm not talking about technological superiority but homogeneous goods.

@3halfshadows Ай бұрын

Of course it doesn't make sense because it's a lie to obfuscate that inflation is good for governments and rich people which is why they create inflation.

@Nautiliam Ай бұрын

@@MRFLOPPYmr *learn

@MRFLOPPYmr Ай бұрын

@@Nautiliam Thanks. As a german I'm always eager to improve👍

@jeremyjw Ай бұрын

i see two leaps in logic inflation, "people will buy something now, in fear of the prices rising" deflation, "people will put off buying something, in hopes that prices will drop" i don't think i'm typical of the average shopper\spender but if i want eed to buy something i just pay the current price i'm no good at predicting the economy

@DemsW Ай бұрын

I think this video focused too much on the consumer base, the truth is, when there is deflation, your money litterally gets more valuable while sitting in your vault, so there is no point in investing it into the economy (stocks, entrepreneurship etc...). Inflation makes it so sitting money is losing value so people are encouraged to invest it into tangible assets. Knowing investments and creating companies is what runs our capitalist economies, then it makes more sense.

@Nautiliam Ай бұрын

@@DemsWThat's better, thanks

@jsponson 26 күн бұрын

Economics is full of theories that don't always accurately reflect reality. E.g. Many electronics get cheaper as they mature but people aren't simple algorithms that keep waiting for price drops. People who buy things earlier get to start enjoying them sooner. In real life, consumers normally don't mind waiting a few months for a sale, but not waiting for years until the prices stop falling.

@laine3396 25 күн бұрын

@@DemsW If the ultimate goal of capitalist economies is to make people richer, why not just use deflation as a way to do that?

@DemsW 25 күн бұрын

@@laine3396 I don't really understand your question. Deflation slows down the economy which in turns kills the abundance that a thriving economy gives. That is pretty undesirable.

@Aquablue62 Ай бұрын

More people have jobs, but you forgot the part where the people who have jobs get paid the same.

@RyanMcCauley-cj5rw 28 күн бұрын

As the video points out (and as a glance at my own paycheck and job signs in businesses reveal), wages have been growing. People are getting paid more than they were.

@derAtze 25 күн бұрын

@@RyanMcCauley-cj5rwthat's a bit shallow tho. Two parts: first of all, growth doesn't equal that it's a good value. Only that it has been more than before, which turns out to be less than needed. Secondly, inflation gets calculated on ALL goods that get produced or sold in an economy. But different categories of goods vary wildly in price change. Normally when there is an inflation inducing event, whole sectors may be cheaper than before the event, but other sectors rise much, much more. Turns out prices rise most on consumer goods and housing. That leads to the individual consumer having to spend way more on necessities, so even if there is 5% inflation overall, the individuum might have to pay 15%+ more than they used to. So a 3% raise might not even come close to stall the effect of inflation especially on low wage incomes

@hewitc 25 күн бұрын

wages have been going up. the businesses I know keep offering higher wages because they can't get anyone willing to work.

@jandv3539 9 күн бұрын

@@derAtze inflation does not get calculated on all goods, it gets calculated on a set of goods and services, referred to as the 'basket'. This basket represents the pending patterns of your average household and incluses food, medecine, housing, clothing etc. They are also weighted so things like housing will have a more substantial effect on the global inflation rate.

@archmagusnova Күн бұрын

@@hewitc Businesses are trying to hire people for a service and are struggling to find someone willing to accept a low offer? Yeah, sounds like they weren't offering enough. They should be willing to pay more or people will go with a competitor that offers more.

@adarshkumar4336 Ай бұрын

That was a weird ad spot. Came out of nowhere

@jonathangreenlee9805 Ай бұрын

The increased CPM enable Vox to hire 1/20th more of an independent contractor though 😊

@Alex-mc5yn 27 күн бұрын

That's the idea, when it's predictable, you would be more inclined to skip it. Many regular youtubers do that as well as the opposite of it when they would change into a different set of clothes during the ad so you could quickly hover over the timeline and skip the ad.

@derAtze 25 күн бұрын

They don't change conciously, they just record it on a different day because the sponsor often times comes after the production of the video. The effect you describe is still a nice thing for the consumer :) @@Alex-mc5yn

@SmoggySandwich Ай бұрын

Except these days companies take all the profit of inflation for themselves and still lay off people.

@sprinkle61 Ай бұрын

There ARE no 'profits from inflation', this is a lie, and to be fair, this video parrots this lie to you, which is why you restponded. HOW does printing more pieces of paper create more purchasing power in the real world ? Of course it does not. Companies lay off people because they no longer need workers, full stop. The economy does not 'need' 2 % inflation, the economy needs 2 % (or more) real growth. If real growth in real profits was happening, then more workers would be needed, and since this current 'growth' is just an inflationary lie, of course no new workers are needed, and as customers are squeezed by inflationary theft of their real purchasing power, less employees are needed to earn what little real profits are still out there.

@daveoceanic5 Ай бұрын

40+ years of consolidation. Where once there were a dozen suppliers now there are two or three. We need more competition in the market to drive down profits.

@WhyWorldWet Ай бұрын

We need deflation ASAP. 2% inflation never benefited the people. It's always been for the corporations bottom line. Charge more and more. People always paying the price.

@riggsmarkham922 Ай бұрын

Over the past few years layoffs have been low (except in the tech sector) and wage gains has been high (especially among low income workers).

@alexipestov7002 Ай бұрын

@@WhyWorldWet Not productive businesses, those who control the new currency pumped into the system. Why do you think central bankers, bankers and wall street stay on the top? It's not hard when they get the new dollars first. And when they spend tomorrows dollars at today's prices... well, they can consolidate their control on resources despite their mismanagement

@Kaustavpatell Ай бұрын

I foresee a recession lasting 2-3 years, and if inflation continues to surge, the Federal Reserve will likely raise interest rates soon. Inflation is causing various issues worldwide, such as food shortages, scarcities of diesel and heating fuel, and significant spikes in housing prices, leading to a potential financial market crash. This global downturn could have long-lasting repercussions. Given the current inflation rate of approximately 9%, my main worry is how to optimize my savings and retirement fund, which has remained stagnant at around $300,000, yielding almost no gains for quite some time.

@donovantobs Ай бұрын

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@rachelonigirl Ай бұрын

I'm sure the idea of an invstment-Adviser might sound controversial to a few, but a new study by Motley-fool found out that demand for Financial-Advisers sky-rocketed by over 42% since the pandemic and based on firsthand encounter I can say for certain their skillsets are topnotch. I've accrued north of 580k within 16-months from an initially stagnant Portf0lio worth 85k.

@Monicamonasky- Ай бұрын

Inflation is over 10% here in the UK, but as we know it's definitely way more than the Government would like to admit. My plan is to earn more passive income and ride this out, can your Investment-adviser assist?

@Monicamonasky- Ай бұрын

She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.

@theEvilLord90 Ай бұрын

People like these have been foreseeing a recession since last 10 years. Heck we came out of the great recession of 2008 and people immediately started to wish for another

@Higuannn 29 күн бұрын

I love this and DCA everyday on what I'm overweight in. I used to do the auto deposit however I stopped when I couldn't guarantee at what time my deposit would go thru. I like to control the time I deposit and buy daily. Love your video. New subscriber here.

@Jaymilnere 29 күн бұрын

I invest everyday in a round of stocks always looking to DCA down. I increase my deposits monthly. I am never good at timing the market so long term and DCA mindset works for me. How do you go about yours?

@Higuannn 29 күн бұрын

@@Jaymilnere I do not invest on my own, I and a few Neighbors in Bel Air Area work with an advisor who prefers we DCA instead of a lump sum purchase, Following this, my portfolio grew 40% in the last quarter.

@Higuannn 29 күн бұрын

I do not invest on my own, I and a few Neighbors in Bel Air Area work with an advisor who prefers we DCA instead of a lump sum purchase, Following this, my portfolio grew 40% in the last quarter.

@Higuannn 29 күн бұрын

@Angelavaldess 28 күн бұрын

@@Jaymilnere You're right, I and a few Neighbors in Bel Air Area work with such advisor who prefers we DCA instead of a lump sum purchase, Following this, my portfolio grew 40% in the last quarter.

@Flight1023 Ай бұрын

3:47 < AD skip

@rudolfsgills Ай бұрын

3:04 - 3:47

@flamerider03 Ай бұрын

get sponsorblock

@rudolfsgills Ай бұрын

@@flamerider03 I have sponcorblock, but people on mobile don't.

@Occidentally Ай бұрын

Get revanced

@rudolfsgills Ай бұрын

@@Occidentally Most people choose not to get it

@Ore0219 Ай бұрын

Companies cut labor no matter what because they are only concerned with increasing shareholder profit.

@zachg9065 Ай бұрын

Correct

@ricardorien Ай бұрын

In every country in every side of this world. Math matters, no feelings. Greetings from Venezuela, bigger hiperinflation on this planet.

@Dynasty1818 Ай бұрын

I sometimes don't get the whining about shareholder returns. If the bank reduced your interest rates on savings, you'd move somewhere else. Shareholders would do the same. "Okay, lower your profits, I want my money back though." If loads do that, the company folds as most companies are private and built off shareholders. So they get their returns, as agreed. As YOU'D expect if giving your money away. If these companies fail, people lose jobs. I get the frustration, but shareholders are entitled to returns, you'd do the same if you could.

@d1j16 Ай бұрын

Gotta show that YOY profit growth and the shareholders/board don't care what means is used to get it, even if it means dancing on the line of legality. The shareholders won't get punished even if something illegal occurs and their profits won't be forfeited, so it isn't as if they need to care.

@enzmondo Ай бұрын

well yes!

@thexht7927 Ай бұрын

So you tell me the economy runs by encouraging people buy things they don’t actually need? Because if they really need it, they won’t wait for lower price tomorrow

@unshakablesoul 29 күн бұрын

Right? Not to mention, many buy less not because they are 'waiting' but because they actually have no money to spend. (!)

@thexht7927 29 күн бұрын

@@unshakablesoul no inflation is still best if everyone just buys thing they need at the right time, and assuming everyone has basic income for living

@ltgdr6298 27 күн бұрын

@@unshakablesoul this is late state capitalism

@timgeurts 23 күн бұрын

Yes my guy we buy more than food, water and fuel. Any other interesting discoveries?

@CC-hx5fz 11 күн бұрын

Luxury goods are a distinct economy of their own.

@TETSU2249 26 күн бұрын

5:00 "consumers stop making purchases in hope things will be cheaper"? Am I the only one who buys things because I need them, not because they are cheap or expensive?

@diomerda111 11 күн бұрын

No, and 99.99% of the population does the exact same. What they are saying in this video is total ballocks, much like everything else that Vox posts.

@TesserId Ай бұрын

It's tax on people who stuff their money in their mattress.

@drewmqn Ай бұрын

You're not wrong. Incentivizing more productive use of capital Is a side effect of inflation.

@oas8766 Ай бұрын

to those most in debt (the richest have access to most debt).

@designeedesigner6182 Ай бұрын

It's devastating to people on fixed incomes like pensioners and people on welfare.

@samst.germain6488 Ай бұрын

But putting your money in your mattress is straight up not a good idea, risk premiums are highly correlated with inflation

@ciro_costa Ай бұрын

So.... Billionaires?

@juliegolick Ай бұрын

As a medieval historian, I can tell you that the modern approach to inflation ("a little inflation is a good thing") is an historical abnormality. Historically, prices stayed relatively the same, even over generations, unless there was a major shock to the economy (like the king discovering a new gold mine, or something).

@JZTechEngineering Ай бұрын

Historical y we had far more economic crisis then today

@prevosfr Ай бұрын

yes, but greed was allowed to balloon.

@pfefferle74 Ай бұрын

They also burned witches in the middle ages. But people get smarter.

@funtechu Ай бұрын

Lol, you are no economic historian. Periods of inflation and deflation have both been common historically.

@redhidinghood9337 Ай бұрын

@@pfefferle74 burning of witches only really picked up in the modern age and was rare in the middle ages

@jervoskitzin Ай бұрын

"The reason inflation can't stay at zero is because governments and their banks don't want it to" Oh, so it can stay at 0. People are just greedy. Shocker

@elizabethhenning778 Ай бұрын

You didn't watch the whole video or you just didn't understand it?

@lesmurphy4441 Ай бұрын

No, in the US, if inflation stays at 0%, things for the average American would be WAY worse. With inflation, business have a small pie to get a slice of that the federal government creates. If businesses have no pie to chase, businesses are more likely to hoard cash instead of hiring and investing.

@DemsW Ай бұрын

Did the whole video go over your head lol ?

@theEvilLord90 Ай бұрын

If inflation stays at zero, you also don’t get pay hikes.

@chikumori5530 Ай бұрын

@@lesmurphy4441 You mean like they are already doing now?

@mariuszarszylo1476 26 күн бұрын

There needs to be an asterisk next to your title - "Why can't prices just stay the same? *in theory"

@1237tnb Ай бұрын

I thought about it, and I don't agree. "People buy stuff now because they fear that the price will increase." Well, there's some things that consumers can't put off buying like food and gas. People will buy regardless of the price, they might just use substitutes. Then there's stuff that People buy relatively infrequently like TVs and computers. The prices of TVs ans computers continues to decrease because of Moore's Law. Then there's the things that people really seldom by such as cars and household appliances. I feel that people buy this when they meet the intersection of needing to and having the money to do so. I've never had a perfectly good refrigerator and said, let me go out and get a new one because it will cost more in a year. Prices increasing year after year will always be the case. I'm not saying that inflation doesn't have to exist, but I'm saying that I don't believe that's the reason that inflation exists.

@FarazNajir Ай бұрын

100% agree

@AndiKola Ай бұрын

That's one of the things inflation tend to influence. If you keep your money under your bed, you're not putting them into the economy, you're saving them for when you need them. Good for you, bad for the economy. With policies like this, you're more likely to spend those money in some form or the other, put them back in the economy and that keeps things going, it's not about you losing value of your money, is about you not keeping money and actually put them to use. Now this might mean you have to live paycheck to paycheck and are constantly in debt, but what's more important here, the life and well being of common people or the well being of multi billionaires and trillion dollar companies.

@1237tnb Ай бұрын

@AndiKola I don't think a lot of people put their money under the bed. Illegal immigrants and survivors of the great depression tend to as well as underbanked individuals. However, as long as your money is in a savings account it is contributing to the economy. Even if you are not personally reading the benefits. I personally keep my money in a HYSA and a 401k index fund, so I don't... I don't know I find the whole anti-saving theory to be confusing because I don't know what defines savings and what defines investing in this regard. 🤔

@eklectiktoni Ай бұрын

OMG I was looking for this comment! As someone who has always been in the working poor income bracket, I can guarantee you I don't buy like that. When prices are high, I delay buying - even if it's an important purchase. If push comes to shove and I absolutely can't put it off, I buy the cheapest option possible (which usually means thrift/used). Who are these people who go: "Wow everything's so expensive now....better go on a shopping spree!" 🙄

@joshabrogena1240 29 күн бұрын

agree, that's a really weird assumption on which the cycle seems to heavily rely on i think most people are like me who is a hospital bill away from bankruptcy, so i can't imagine how the cycle implies that the majority would minmax their purchases as though they have their morning coffee observing the inflation rates. the first thing that comes to mind where this sort of spending behavior is sane and expected is with GPUs -how the prices for them increased heavily due to demand from people using them to mine cryptocurrency for most else i think more studies need to be made about how people spend their money. all this talk seems like it's the businessmen feeding the economists their qualitative data.

@aaron.harrell Ай бұрын

The “virtuous cycle” primarily benefits debt-holders by eroding debt. Who are the biggest debt-holders? Governments and corporations.

@aaron.harrell Ай бұрын

Also, governments with a graduated tax structure (e.g., the U.S.) bring in more real tax revenue because the tax brackets aren’t appropriately indexed for inflation.

@spaceprior 28 күн бұрын

Hold on, most debt has interest rates greater than 2% which would completely erase this effect. If someone offers to pay you back with less than 2% interest... who would make that deal? I'm gonna guess no one?

@aaron.harrell 27 күн бұрын

@@spaceprior You’d think that, but consider how artificially low the interest rates on U.S. bonds were up until very recently. They had interest rates less than 1% in 2020. For the U.S., foreign governments are big buyers of U.S. debt and have been even when the interest is less than the U.S. inflation rate. If the foreign country has an inflation rate higher than the U.S., it may make sense to invest in U.S. bonds even if the returns do not exceed the U.S. inflation rate.

@theaxer3751 27 күн бұрын

@@spaceprior My bank took that deal. I have my mortgage set for 20 years against 1,4%

@spaceprior 27 күн бұрын

@@theaxer3751 That's extremely confusing. Is it subsidized?

@terry9397 Ай бұрын

No mention of the most important contributor to long term inflation: Money creation When money can be created out of thin air whenever somebody takes out a loan, it devalues all existing money. In the short term supply and demand impact prices, in the long term it is the devaluation of money which continues the unending increase in prices.

@paulfoster7464 28 күн бұрын

@terry9397 Thank you for being like the only person here who actually understands the main cause of inflation. We need to teach economics in high school because almost everyone commenting here obviously never studied economics or classical monetary theory.

@harrisjm62 25 күн бұрын

Thats not how the accounting always works. Whenever you deposit cash at a bank, a matching deposit is created. In a simple model, this would double the money supply. No prices change however because everyone's networth remains the same, so everyone's purchasing power remains the same. You traded a cash asset for a deposit asset, and the bank recieved a cash asset for a deposit liability. Money doubled, but no networth created. There are ways to create money "out of thin air" which effect networth, but this disconnect means that money supply numbers are not reliable. To add to this, the type of money also matters. Reserves at the fed are a kind of money only used between banks and are not used for consumer goods. There's no reason to believe that increasing reserves at the fed would increase CPI prices.

@theshi3152 23 күн бұрын

This is wildly incorrect. "printing money" doesn't devalue currency. period. this is a capitalist myth. devaluing happens because of inflation. inflation happens because of Demand. money printing can CAUSE demand increase. which is where you get printing devalues currency. its not exactly as straight line as the statement implies. im not even talking MMT im talking literally just how money works.

@jasondashney 21 күн бұрын

@@harrisjm62 in a closed loop system, perhaps. But this is a global economy. It's not just a coincidence that literally every time government creates a bunch of money they a bunch of inflation. The causation could not be more clear.

@jasondashney 21 күн бұрын

I'm only a minute into this video, but I'm not gonna watch the rest of it if they don't mention the literal thing that causes inflation. I actually came to the comments to see if anyone was mentioning that, because if not, this whole video is literally useless. Other than a short term supply shock, these days inflation only comes from the printing press. It's no wonder we have such a bad policy when for some reason, the media does not want to acknowledge that the government is 100% the cause of inflation. I'm not surprised people have no idea.

@SoooHello 26 күн бұрын

Not a single word about money printing, by far the main cause? If the whole system is 1 coin = 1 apple, and you print 1 more coin, it becomes 2 coins = 1 apple. Suddenly, your coin is worth 50% and the other 50% goes to the one who printed it. At the moment when governments spend the freshly printed money, it’s still worth the same; inflation happens when the system absorbs it and adjusts to more money for the same number of goods, some time later. Thus, inflation is taxation without legislation.

@brianposada87 Ай бұрын

I feel like deflation is a fear of corporations. We definitely need to lower these out of control prices with a small deflation.

@andrewn7365 Ай бұрын

Yeah. As soon as they brought up deflation, they immediately jumped to the worst case deflationary spiral. There can be inflationary spirals (hyperinflation) too, so why the instant jump to the worst case scenario for deflation? They also didn't mention how much inflation benefits those with high debt.

@spe3dy744 Ай бұрын

@@andrewn7365it's much harder to control deflation, as they said. The economy isn't smth you just control with a lever.

@andrewn7365 Ай бұрын

@@spe3dy744 True. I'm just feeling that there's nuance missing from their explanation of deflation.

@JZTechEngineering Ай бұрын

@@andrewn7365 because it's harder to control deflation

@jonathangreenlee9805 Ай бұрын

It's a really fear of governments... corporations are nothing more than the high-functioning part of government. From the old kings of Europe, corporations like the West India Company still are issued charters and treated as "individuals". It's a practice that wont look great 1000 years from now (IMHO)

@braveheartbob3473 Ай бұрын

i have seen a 50% increase in the cost of living over the past 2-3 years. It used to cost me $5k a month to get by, now it's more like 7-8K food almost costs double what it used to and no change in sight (Canada)

@chrischoir3594 Ай бұрын

stop voting for liberals

@aolson1111 29 күн бұрын

Then move.

@TunaIRL 28 күн бұрын

In 2-3 years you haven't changed the way you live at all?

@eq7161 27 күн бұрын

@@aolson1111 a condom could have saved the world from this comment

@gobblinal 24 күн бұрын

@@aolson1111 To where?

@AstaKristjan 10 күн бұрын

You folks do not know what inflation is. Prices never go down again. Prices may stabilize one day, and that's how inflation works around the world.

@Erinmills98 10 күн бұрын

I haven’t seen a gas station selling gas for $2.00 nor have I seen a loaf of bread for $.75 …. You are right prices of most consumable items won’t go down

@benparry5912 26 күн бұрын

Come to Australia - we have 2 major grocery stores that have made record profits in the past 2 years not only in Australia, but the world. A country of 27~ million having 2 companies making the most amount of profit in the world. It also doesn’t help that these two companies also own most of the petrol stations and liquor stores. What about banks? There are 75~ banks in AUS and 95% of them are owned by the four biggest ones.

@jasondashney 21 күн бұрын

It's such a tough one, because I love the idea of capitalism and free markets, but they inevitably lead to consolidation. It's basically a law of nature at this point. How on earth do we keep the benefits of capitalism while stopping all of this consolidation?

@HeBe3y4uu69 9 күн бұрын

@@jasondashney with partial government regulations (just not to much or it will become communism)

@32srt32 Ай бұрын

noboby i know has a wage that has kept up with inflation!

@aolson1111 29 күн бұрын

"If I haven't personally experienced it, it doesn't exist!!!"

@funcompilator1202 28 күн бұрын

@@aolson1111 you can just search for wage grownings and inflation rates, most wages really dont keep up with inflation

@Nichrysalis 28 күн бұрын

@@aolson1111No OP is right, even if he is citing anecdotal evidence. There are entire swaths of demographics that didn't see wages change at all, which this video did a bad job talking about. Generally if you were a middle income earner or higher OR you lived in a metro area, you saw your or your neighbor's wages climb in some way. However, rural residents and lower income earners hardly saw their wages change at all. These groups of people don't have much power or influence to change their wages even as prices go up around them. It's one of the main reasons homelessness is climbing and farmers/small towns are declaring bankruptcy.

@hewitc 25 күн бұрын

I don't know what "keeping up" means for sure, but businesses are raising salaries to attract people, in my experience.

@theshi3152 23 күн бұрын

@@hewitc doesn't mean its equivalent to the massive amount of wage stagnation the west has seen for the past 30 years. Min wage would be near 25 to 30 $ if it kept up with productivity. the primary driver for labour

@SgtD85 Ай бұрын

The 1% dont want to lose their money. So they increase their prices. Instead of taking a loss themselves.

@Hollywood041 Ай бұрын

Correct. That is Capitalism.

@FarberBob678 Ай бұрын

Inflation hurts the poor more than the rich

@John_Jack Ай бұрын

@@FarberBob678 Inflation hurts the poor *and benefits* the rich.

@bingoberra18 Ай бұрын

Economics proffessor I see.

@FarberBob678 Ай бұрын

@@John_Jack yeah, I guess so

@CAGreve1231 26 күн бұрын

One thing this video misses: innovation makes products cheaper which drives deflation. Look at the cost of a big screen TV today compared to 10 years ago, for example. Businesses are constantly trying to make products less expensive so that they are more competitive in the marketplace. The government has many ways that they prevent this not just interest rate. Regulations are another big tool. They regulate business which make certain products more expensive than they need to be. This is why politicians are so rich: they use regulations to pick the winners and losers in an economy so they can always invest in the winners. The result of this is things being more difficult for all of us. Regardless of whether government chooses interest rates or regulations, the fact is that they deliberately make things more expensive knowing that wages will not keep up. Politicians do not care about us. They only care about themselves.

@lostinbravado Ай бұрын

We want deflation. But to have steady deflation we need to consistently incentivize spending. People must be encouraged to continue to spend, even as prices go down. So, they need more cash. This is where things like Universal Basic Income come in. We've just never done this before and it's scary. Technology is a deflationary thing. If we want things to improve, we must embrace sustainable deflationary systems.

@RT-. 24 күн бұрын

UBI means printing more money which means inflation. It might be possible, but only if the government is *much* less wasteful than it currently is.

@theshi3152 23 күн бұрын

@@RT-. nope. wrong and wildly incorrect. it can be paid for with Social spending that's already in the budget for most countries. Canada's will actually DECREASE spending if we swapped to a negative income tax model. I've ran the numbers. its extremely feasible to set a bottom for the economy.

@vipu6821 18 күн бұрын

You incentivize people to spend by making good products that people think is worth giving away their hard earned money, inflation just creates the opposite incentive to make worse and worse products. You can see it now and last few years especially when companies just keep cutting and worsening their products while keeping or raising prices. If there was 0 inflation or mild deflation those companies would need to make good products so people want to actually buy them, also there would be less waste in general when people would not buy some useless trinkets and products would be more like many years ago when they were designed to last as long as possible and be good quality.

@NearQuasar 13 күн бұрын

Deflation is a terrible idea, it kills investment, makes debt harder to pay and has led to decades long economic stagnation in Japan for example.

@theshi3152 13 күн бұрын

@@NearQuasar Sustained Deflation. leads to what your refering to. Deflation happens all the time with products. the issue is it doesn't happen on the economy as a whole at all. a little bit of deflation is actually a good thing every few years. but Capitalism will resist the Boom and Bust cycle it enforces. so never deflate ever because bahhhhhddd

@conahanbarbarian9719 Ай бұрын

So, basically, inflation happens because we need profit because we need profit because we need profit... God forbid we make the government spend money to make the economy stable for the people who live within it. The gist seems to be that prices can't stay the same because the economy assumes a state of perpetual growth, specifically growth of revenues, is natural and so companies constantly increase prices and decrease the value of currency in circulation. Thus the economy has to "expand" with the creation of more jobs and more resources. The expansion further decreases value of our money and necessitates further growth. Stability in this kind of economy is equated with "stagnation" to make it seem undesirable.

@HolahkuTaigiTWFormosanDiplomat Ай бұрын

Until the last drop of water flowing. Ok it's never too late...

@marcusstrinidad Ай бұрын

If the government spends money that also contributes to inflation. Besides interest rates, the only other significant control governments have to curb inflation is taxation which is almost always politically unpopular and requires legislation (at least in the US). You need to take money OUT of the economy so there’s less dollars chasing the same amount of goods.

@kevinburrows7940 23 күн бұрын

No. Inflation is literally because the government has an infinite money printer. The definition of inflation is the expansion of money supply. Not higher prices

@theshi3152 23 күн бұрын

@@kevinburrows7940 nope this is just wrong. "in economics, inflation is a general increase in the prices of goods and services in an economy." Wiki

@theshi3152 23 күн бұрын

@@marcusstrinidad Interest rates effect inflation. Higher interest lower inflation. hire interet enough and inflation will deflate as many need to cut spending to pay for interest.

@MBarberfan4life Ай бұрын

Ah, yes, losing 2% of my purchasing power every year is great! /sarcasm

@daviddavidson6278 Ай бұрын

Gaining 2% & more given real wage rates is great!

@joni-nv3el Ай бұрын

It mean that ur life in 50 more years will be double spending

@grimaffiliations3671 Ай бұрын

thats the trade off for growth and high employment levels. No free lunch. Also wages rise with inflation, so your purchasing power often stays the same or grows over time

@Hollywood041 Ай бұрын

That is why you are [[[supposed]]] to get a wage increase to match inflation every year, that is what the govt does for its employees ie soldiers, but then also your company should be doing performance reviews to pay you more for good work, and That is where you would get your Purchasing Power Parity that you afford: a vacation, or a better vacation, or a second vacation, wtc whatever it is you wish to spend money on. That is is supposed to be your reward for good work, but you should definitely be getting a raise every year to coincide w/ the allowed inflation to cover rent, food, utilities.

@justawhim Ай бұрын

@@Hollywood041but it doesn’t happen when private institutions can get away with it

@tmer831 12 күн бұрын

America is currently plagued by the hydra-headed evil duo of inflation and recession. The worst part about this recession is that consumers are racking up credit card debt. In April alone, credit card debt went up 20% while rates have doubled in a year. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse has indeed begun..

@SeanTalkoff 12 күн бұрын

Every day we have a new problem. It's the new normal. At first we thought it was a crisis, now we know it's a new normal and we have to adapt. this year will be a year of severe economic pain all over the nation.. what steps can we take to generate more income during quantitative adjustment?I can't afford my hard-earned 180k savings to turn to dust

@DavidCovington-st2id 12 күн бұрын

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@SteveDutton-v 12 күн бұрын

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@SteveDutton-v 12 күн бұрын

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@CJordanNicholson Ай бұрын

You say when prices fall, consumers "may hold off on making big purchases." Is there any evidence of this?

@jasondashney 21 күн бұрын

In housing this is absolutely true beyond a shadow of a doubt, as well as automobiles. Probably not for things like major appliances, but if you're buying something that's equivalent to a year or more's worth of your wages, you absolutely will hold off if the prices are noticeably coming down.

@vipu6821 18 күн бұрын

@@jasondashney So if you want to buy $30k car you are not gonna buy it because it will probably be $600 cheaper after 1 year? Then why buy it even then because if you wait 1 more year it will be $1200 cheaper!! I will answer, no you would not wait unless you didnt really need or want it. Also this already happens so it makes no difference anyway to todays life, well other than you probably dont get enough raises at job to keep up with inflation.

@Yetia 8 күн бұрын

It seems it would be aplicable for housing, but also I doubt it. For long terms loans it would be true, because as time goes, it is harder to pay the mortgage.

@jasondashney 6 күн бұрын

@@vipu6821 during Covid, prices went absolutely bananas, and everybody knew they would come back down to earth. if there’s a noticeable spike in prices, you are definitely more likely to shop carefully. also, cars absolutely do come down year over a year. The used market is awesome. Wait eight years and you can get the vehicle you love for half price.

@jasondashney Күн бұрын

@@vipu6821 during the pandemic, used car prices went through the roof. New ones as well. We knew the prices would come down. Also, with cars, you might wait and buy the same vehicle used and save a boatload. Another factor is interest rates, and this one is HUGE. Most people don’t make large purchases in cash and the difference between a 3% interest rate and a 7% interest rate is massive to the overall price so if you believe interest rates will come down in the next six months, you’re way more likely to hold off that purchase because it absolutely lowers the amount of money you have to pay for it. You will hold your old vehicle together with duct tape, and string.

@thisismyviewingchannel926 Ай бұрын

This is all theory. Companies and raking in cash and still laying off workers.

@Hollywood041 Ай бұрын

It used to be that all products were physical. I make corn, corn gone, corn bad, I make new corn. Now a lot of product is digital, or intellectual. I make algorithm, it works, you copy/copy/copy and sell, I am doing nothing b/c there is no new algorithm needed, you fire me.

@BenterKoux Ай бұрын

Unemployment in the US is getting lower though. It could also be that companies aren't economical feasible. Thats what happen to the gaming industry after the covid phase, because less people were inside and playing games.

@MariuszChr 27 күн бұрын

Because they have to please investors, and just merely keep workers in. They "don't have money left" after pleasing investors and paying board of directors. Even if they do, they will invest in growth. Employees just have to no incentive to leave... That's how I see it at least.

@ltgdr6298 27 күн бұрын

@@BenterKoux unemployment is getting lower, yes it sure does when erasing people from the unmemployed list

@hewitc 25 күн бұрын

The companies I know (smaller businesses) are not laying off people. They are having trouble getting employees even as they offer higher wages. Unemployment is historically low. People can get jobs and have choices. And many today don't really want to do any work that involves getting out of bed, dressing and leaving the home.

@SparklyVenom Ай бұрын

So they want infinite growth on a finite planet.

@Hollywood041 Ай бұрын

Yes, finally. You get it. Just continuously make more even if there is no room/use for it.

@lesmurphy4441 Ай бұрын

Myopic view.

@DemsW Ай бұрын

The universe is pretty big though

@Nautiliam Ай бұрын

@@DemsWBut we don't have access to that

@DemsW Ай бұрын

@@NautiliamSpaceships

@MrGorillaVR 27 күн бұрын

i got an ad for this video on this video..

@CoryLafund 14 күн бұрын

Thank goodness you brought this up! Truly, investing has changed my perspective on how one can succeed in life; working multiple jobs isn't the optimal way to attain financial freedom and unfortunately, we discover this later in life. Currently earn as much as 10 grand weekly and this has improved my financial life. Great piece!..

@BrettGregory299 14 күн бұрын

Wow, congratulations on your impressive investment success! Your discipline and focus on delayed gratification is truly inspiring. I'm curious, what are some of the key factors that you consider when making investment decisions? Do you have any tips for those of us who are just starting to dip our toes into the world of investing? Thanks for sharing your story!

@Karenfloen 14 күн бұрын

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@DanielHaskel 14 күн бұрын

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@RyanCole295 14 күн бұрын

SARAH JENNIE DAVIS

@RyanCole295 14 күн бұрын

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@vak5461 Ай бұрын

We are in a finite world that we are seeking infinite growth, forever at 2% or more a year. What?

@Hollywood041 Ай бұрын

Correct. That is Capitalism.

@John_Jack Ай бұрын

Economists only care about on-paper growth. If the value of the dollar goes down, then an equal amount of wealth appears to increase in value (on-paper).

@jacobfrazier9582 Ай бұрын

@@John_Jack great but shareholders and CEOs very much just want infinite money forever and they are the people who run things

@crossiossi Ай бұрын

Well said but i think we are in a system built on everexpanding growth due to nationstates competing for power on the world stage and capitalism won over collective socialism due to the increased efficiency and we took the dollar of the gold standard to promote lending and growth in the shorterm but it is leading to inflation problems now that are allmost inpossible to fix.

@angelgjr1999 Ай бұрын

The entire economy is a Ponzi scheme

@enzmondo Ай бұрын

I’m pretty sure people will not hold off from buy a carton of milk half the price it was yesterday. Like no. People will hoard that stuff because they know prices will rise again. Necessities essentially have an infinite demand.

@tonypalmentera7752 Ай бұрын

you can't hoard milk

@vinnycordeiro Ай бұрын

@@tonypalmentera7752 That doesn't mean people won't try it.

@ajrobbins368 Ай бұрын

Lol clearly you never learned about the Substitution Effect. Example: people switch from expensive beef to cheaper pork, pork to cheaper chicken, and finally chicken to rat in a siege or apocalypse scenario.

@tonypalmentera7752 Ай бұрын

@@vinnycordeiro they wouldn't, en masse...if you think they would, go back to school and take psychology and economics.

@vinnycordeiro Ай бұрын

@@tonypalmentera7752 I lived in Brazil through their hyperinflation period, I may have first hand experience that economics books don't tell you because it isn't based in real life, but that's me. I have absolutely no nostalgia of the time when my family had to rush to the market to make the monthly purchase of food when my dad got his payment because prices were raised every single day. In the worst periods prices would raise twice a day. So yeah, believe in what you will.

@ElementEvilTeam 29 күн бұрын

Prices can stay the same for a long time. A good example is Japan where the price of ramen has been the same since the early 90s until recently.

@vipu6821 18 күн бұрын

bUt ThAt iS bAd FoR eConOmY!!!!!!11111 How could people buy things when they know the price of things!?!? Its better when prices keep changing all the time so you never actually know the real worth of things!!! Next government and economists are gonna tell us that inch or centimeter needs to change every month too so the buildings they make is good for their economy!

@goredawg777 Ай бұрын

They managed to do an entire video about inflation without mentioning that it comes from the government expanding the money supply to pay for all the deficit spending....impressive.

@wasing02 Ай бұрын

This is exactly right. Liberals can't admit that because it would spell doom for large government spending programs. It's much easier to blame it on "greedy corporations".

@lesmurphy4441 Ай бұрын

Bingo!

@crossiossi Ай бұрын

Exactly

@Crusuma Ай бұрын

"It's ok if prices rise, so long as wages rise, too." Thats not true. It makes it impossible to safe money for a longer period of time, because it looses it's value.

@jasondashney 21 күн бұрын

Great point. We are at the stage now. Where are the only proper way to keep long-term savings is in the S&P. If your savings aren't in some thing that roughly keeps up with inflation at the very least, then, yeah, saving half your paycheque isn't gonna help you much 50 years later when that money is worth a fraction. Inflation means you can't just save money.

@ORCIproductions 2 күн бұрын

@@jasondashney isnt that the entire point tho? putting your money back into the economy where it can be productive instead of having it in a safe

@jasondashney Күн бұрын

@@ORCIproductions productive for what? Just so it can go up enough that it would be the same as if there was no inflation and you just put it under your mattress? It means you end up exactly the same, but with extra steps.

@garretttjordan 10 күн бұрын

Not only can prices stay the same, they can go down. They did this during the gold era and will do it again during the coming bitcoin era

@ripno2672 Ай бұрын

I think one of the most entertaining things a business owner can do is cut prices and watch their consumers flourish and the utter chaos of the other businesses in the sector.

@richarddecker9515 Ай бұрын

Two percent is a lot higher inflation tax than we think. Think about it this way, NATO has a two percent target for their defense budget. And countries say it’s too expensive. Our American government is not efficient at all. Waste money everywhere, laws should expire in different amounts of time. All these laws that waste money should only last a couple years

@Hollywood041 Ай бұрын

What you call waste may be vital to another. Rethink how you perceive an entire nation.

@faketruth7740 Ай бұрын

Of course, the government needs to waste money. That's the point of the government.

@chaptersword472 Ай бұрын

@@Hollywood041 sending money to a foreign nation that dont care about us is a waste of money

@DemsW Ай бұрын

Not really comparable, NATO asks 2% of GDP, GDP is very much huge, and is so much greater than the actual government's budget (usually around 15%). You are looking at this wrong.

@Nautiliam Ай бұрын

@@chaptersword472 You'll be better if everyone is better. You benefit more from cooperation than competition

@MBarberfan4life Ай бұрын

Prices 'can' stay the same because that has actually been the case before. That was the Federal Reserve's goal at one point.

@berserkerscientist Ай бұрын

Most consumer goods actually *decrease* in price year-over-year. Only ones created and regulated heavily by government go up.

@rphb5870 Ай бұрын

no it wasn't. What kind of silly thing is that. The federal reserves goal, just like every other central banks goals have always been to create inflation. Inflation is a TAX, it does not happen naturally

@minyaksayur Ай бұрын

it can, Japan was proof of that, but their period of negative interest actually makes the economy suffer somehow, because the government expenditure continue to increase. regardless of having no inflation.

@askeladd60 Ай бұрын

@@minyaksayur deflation was only savings grace of Japan's economy during the 90's and early 2000's. Now that they have inflation destroying the purchasing power of their wages, you are starting to see migration out of Japan and towards countries with stronger currencies like Australia, something that was unherd of while Japan was enjoying the benefits of a constantly decreasing cost of living, aka deflation.

@jp4431 23 күн бұрын

Inflation: zero Market: saturated Profit: unchanged Companies: angry noises

@hyxlo_ 24 күн бұрын

Am I the only one who got the ad *for* this video before the actual video started playing?

@TheGreatBertha Ай бұрын

Ok so what about the wage issue..? Is that going to be a separate video cause this one kind of didn’t help explain anything lol

@JZTechEngineering Ай бұрын

Wages are going up with inflation

@thastayapongsak4422 Ай бұрын

@@JZTechEngineering as if 😂

@JZTechEngineering Ай бұрын

@@thastayapongsak4422 you can check the data but they are

@SuperPlayz Ай бұрын

It’s hard to have it track inflation because it’s unpredictable and it is very difficult/impossible to reduce wages.

@SuperPlayz Ай бұрын

It’s also hard to retain workers if you increased suddenly increased wages for one year and then a decade of little increase

@user-fo3xi9nc5p Ай бұрын

Come to JPN. No inflation, No wage increase, No growth, but another countries continue to grow and importing naturalresources becomes harder and harder.

@tonypalmentera7752 Ай бұрын

wage increases, in your mind, only come from inflation? Where did you learn economics, so I never send my kids there.

@michaelsanchez1361 Ай бұрын

Nah you forgot karoshi culture

@Hollywood041 Ай бұрын

On my way.

@SgtJoeSmith 27 күн бұрын

they cant stay the same cause greedy employees keep demanding more yachts.

@beelzking 23 күн бұрын

If you want to see an example of a country that manage to be as close as posibble to 0% inflation/deflation, take a look at Japan before the covid pandemic, their economy basically stayed stagnant for the past 20-30 years since their 1980-90s bubble bursted

@CuriouSniff Ай бұрын

I kinda expect this video to answer what would happen if inflation change keeps happening. $1 right now isn't as valuable as $1 100 years ago. Does that make money less and less valuable? If it is, is that a problem? How to solve that problem so that we don't keep adding zero on our money just because inflation keeps happening? Because personally I don't want my $1 to be less valuable in the future than now

@JZTechEngineering Ай бұрын

You just redenominate your currency

@daviddavidson6278 Ай бұрын

Any individual dollar can become less valuable but don't forget the rest of the money supply. Also its not like this is unique to the US. Do you look at the Yen and think "useless currency" or do you think "Oh, I can make 4.5 million yen per year, guess these prices make sense". Also you can always just do a currency transfer. 1000 USD for a new USD and the government will continue to accept old USD but will only print new USD and will recycle the old USD it receives to new USD. Its way better we have to do this kind of thing every couple of centuries than having to constantly worry about a deflationary spiral.

@CuriouSniff Ай бұрын

@@daviddavidson6278 I see, so that kind of thing to recycle a currency, e.g. decreasing it's zero does exist. I guess that solves my anxiety.

@grimaffiliations3671 Ай бұрын

wages rise with inflation

@pritapp788 Ай бұрын

@@grimaffiliations3671they used to, not anymore. Or you are lucky to get a one-off 20% rise after 3-4 years of inflation being above 5% (which is compounding, unlike the wage increase)

@wizaaeed Ай бұрын

The problem is that nobody cares, so nothing gets solved or done. Debt keeps on debting, inflation keeps on inflating

@Hollywood041 Ай бұрын

We ALL care, we just mostly feel powerless to stop it b/c that requires struggle, like for real real struggle... like, physically taking the means of production away from corporations and them legally changing the circumstances afterward to make it Just. This slaughterhouse no longer belongs to JBS, it is worker owned, let's say that fair compensation is covered by back owed wages, deal complete. Co-op now registered w/ the BBB.

@LiveFreeForLife Ай бұрын

if people actually cared then they should learn about bitcoin and how it can protect people's purchasing power against rising inflation

@stt.9433 28 күн бұрын

@@LiveFreeForLife you're way better off buying gold, crypto is not stable enough.

@LiveFreeForLife 28 күн бұрын

@@stt.9433 if you study enough about Gold and Bitcoin, you'll learn that gold is the worst performing asset compared to stocks, S&P500 and you'll learn that Bitcoin is the best performing asset in the last decade and huge companies and banks are stacking Bitcoin. Learn, research it now

@vipu6821 18 күн бұрын

@@stt.9433 Dont you think it would be bit weird if the price of BTC was stable and still gained all the gains it had? You pay the price of gains in volatility, nothing can go up so much and be stable, the stability will come later when its much bigger and when media isnt full of misinformation and the space isnt full of scammers trying to sell their dog, cat, trump and elon coins. Also gold havent kept up with inflation for at least 40 years so I would say you dont gain anything going from dollar to gold when both lose value against inflation.

@sirdumpybear 26 күн бұрын

I just got an ad for this exact video after it finished ??

@tealkerberus748 27 күн бұрын

This isn't how it was explained to me, but it seems internally consistent. What I was taught is that inflation is aimed at a population of homeowners - such as the boomers in their youth. A young couple save up and buy a house, with a mortgage that is going to take every cent they can spare. They're living on jam sandwiches when they can afford jam, but they feel good about owning their own home. Then over the next few years, their wages go up with inflation, and while the cost of everything else they buy from one week to the next goes up too, their mortgage payments stay the same. They have a little bit more money left over each week than they used to, and this makes them feel prosperous. Feeling prosperous makes them confident - they'll try harder to get a promotion at work, they'll be more likely to buy stuff, all those things. By the time they're ready to have children, they can live on one wage while the other parent is at home with the kids, and although changing down to one wage is a big economic shock just like taking on the mortgage was, they still have the same pattern of every year having a bit more disposable income than the year before, so they still feel prosperous and confident about themselves, their finances, the economy, and their future. It doesn't work on a population that has been priced out of home ownership, but also, just like your explanation, the whole thing falls apart when wages don't rise with inflation. We have to fix wage stagnation!

@AndrewMackoul Ай бұрын

So if there is always inflation, does that mean prices will always go up, slowly (preferably)? Does that mean that eventually we'll need thousand dollar bills? Does that seem ridiculous?

@diegobarreca9970 Ай бұрын

Now yes, maybe in 1000 years no

@arryn786 Ай бұрын

I mean isn’t that how Japan works as well? Even at the level of coins they have 500 yen and thousands of yen notes so how is that actually making everything affordable and keeping prices stable?

@daviddavidson6278 Ай бұрын

Its true we could just increase it like Japan but we could also just do a currency transfer if we care about keeping a low number. The gov just accepts the old USD and recycles it and only prints a new USD

@Mattloxy Ай бұрын

Japan has stagflation or even deflation; sometimes, low interest rates from the Fed. Prices seem so low because they don't have much inflation, and purchasing power has lowered for the yen because of a drop in value compared to the dollar

@davidwen1900 Ай бұрын

It's not ridiculous, it's pretty normal. You used to be able to buy a soda for 5 cents many decades ago

@thejoycode Ай бұрын

Forgot about AI, now companies don't have to hire more to keep up with demand, they can cut employees, and increase prices with nothing to stop them, and that's mass layoffs with extreme inflation and unemployment on the rise... This is the state of 2024

@DemsW Ай бұрын

Capitalism has mechanisms to prevent price gouging like competition (though that fails when patents or the likes prevent it), so where AI cuts jobs, it also cuts costs so the end consumer will pay less.

@mlbonfox8199 29 күн бұрын

Wish should cause deflation (yup

@aolson1111 29 күн бұрын

What's stopping you from using AI in your own business?

@theshi3152 23 күн бұрын

@@DemsW Competition in modern capitalism is a joke. nearly the entirety of the usa meat packing industry is owned by 4 companies

@Sonther Күн бұрын

Governments can create their own inflation by just printing money.

@marcosceros3572 15 күн бұрын

You DID NOT explain the topic proposed in the thumbnail. Zero explanation of money volume vs demand, why government needs to print money etc etc. You just chose ONE of the reasons inflation is kept at a certain level, and disregarded the rest. Very poor coverage of the topic.

@Dan-Rather 15 күн бұрын

Lol.. what did u expect from Vox?

@marcosceros3572 15 күн бұрын

@@Dan-Rather fair enough

@chadjones1266 Ай бұрын

Inflation is a way to steal money from your bank account.

@Tienisto Ай бұрын

That's why you don't put all your savings into a bank account but into stocks

@lesmurphy4441 Ай бұрын

Invest in assets and you won't have this problem.

@hewitc 25 күн бұрын

no one is trying to steal your money. If you don't like banks use cash

@vipu6821 18 күн бұрын

@@hewitc Using cash doesnt help, your money is worth LESS, its not stealing how you think it is, you lose value while the people who "steal" are gaining value.

@hewitc 18 күн бұрын

@@vipu6821 So how exactly are banks stealing? Or was that someone else's gripe? They provide a service for fees.

@michael2275 Ай бұрын

Overall they pretty much did under the gold standard. They fluctuated but generally remained the same average over the long term. Fiat is a disease costing us greatly.

@daviddavidson6278 Ай бұрын

The gold standard just experienced the same problems they laid out. No control over money supply means deflationary spirals. How is fiat the problem when the gold standard experiences these problems?

@michael2275 Ай бұрын

@@daviddavidson6278 Gold standard self regulates, no need to 'control' the money supply. You're a Keynesian fiat thinker, your frame of thinking is all distorted like a fish that doesn't know it's in water.

@daviddavidson6278 Ай бұрын

@@michael2275 gold standard doesn’t self regulate, what’s the difference between a GS system where the amount of gold doubles and a USD system where the amount of USD doubles.

@michael2275 Ай бұрын

@@daviddavidson6278 Gold consistently has had 1-3% inflation through history naturally regulated by geology and advancement of technology. Also, if more gold is found the spending power goes to the miner who has costs so must sell not a government that monetizes it's debt money into existence by the central bank at will and inevitably abuses it causing huge inequality like now. You're totally a fish that can't see the water lol.

@DanielDuhon 26 күн бұрын

Prices can stay the same, people are just greedy.

@florianzumwinkel1742 Ай бұрын

You should have mentioned that Inflation is also a means of counties getting rid of their overboarding debts. So in the end we still have to pay the price for all that government spending via this "hidden tax". Inflation serves the interest of everyone who owns hard assets or can access capital via cheap credit. But it mostly hurts those at the lower end of society. These again are the people who depend on social spending the most. Guess who they are electing? Politicians who promise increased spending and pile up even more debt. There is an alternative to this inflationary debt based system. It is called Austrian economics and hard money. Societies and empires who used and maintained hard money (mostly Gold) throughout history could thrive. Those who overspend (for example on war) and debased their currency declined over time. It is our choice and if you look into history and pay attention to the signs you can see where this monetary system is going...

@Shini1984 Ай бұрын

Here's a better cycle: wages don't grow, prices don't grow, profits remain stable, everyone's happy.

@FarberBob678 Ай бұрын

Except the government and central bank

@justawhim Ай бұрын

Except people don’t always buy consistent amounts, which lead to inconsistent revenue, which leads to inconsistent pricing reacting yo that inconsistency, Which is why if everything is zero, you will have some areas or times of deflation or inflation, only the average can be zero. And since we don’t have many tools to drag things out of a deflationary spiral, it can easily go out of control.

@sivispacemparabellum5160 Ай бұрын

But then, how will the government grow and obtain more power and spend more?

Ай бұрын

population increases so there will be more consumers thus more ptofit.

@justawhim Ай бұрын

@@sivispacemparabellum5160 how do you have a unified currency across a region without a government backing it up? Sure, have a private institution do it, they’ll just do the same things and the jobs of the government

@traplover6357 Ай бұрын

Sad we're taught math/physics formulas we'll never use or read ancient literature not to care about again. But no financial literacy!

@JZTechEngineering Ай бұрын

We teach thst

@phoenix5054 Ай бұрын

Inflation is actually taught in basic econ class in college.

@Hollywood041 Ай бұрын

@@phoenix5054 College. Their argument is that this should be more basic than college, I guess. Personal financial literacy of macroeconomics of your nation's GDP in relation to Intl Trade Deficits in re the most recent Tariffs imposed by adversarial States as well as violation of trade agreements w/ long-time allies and how that relates to one's capability of purchasing pasta on spaghetti night, ugh jeez weren't you people even learning to read?!

@phoenix5054 Ай бұрын

@@Hollywood041I'm not American so I actually don't know if you have basic and mandatory Econ class in high school. But from where I came from, we do.

@metricmine Ай бұрын

According to the video, you the consumer have the power to stop inflation or cause deflation. Stop overspending. Refuse to buy things that are too high and you don't need. They try to scare you with threats that there will be less employment if you do that. If you cause deflation, less people will need to work to survive. A whole family surviving from one working wage is better than everyone trying to seek employment. You have the power. But I guess that may never happen since we no longer have the same type of family support structure as we did before. Almost everyone's family is broken these days.

@geoffdavids7647 26 күн бұрын

Ah yes, the perfect solution to a systemic problem. Insist that the real issue is the individual choices of people in the system, and blame them for not choosing differently. We definitely aren't heavily influenced and shaped by our environment as human beings are we

@sonicwaveinfinitymiddwelle8555 29 күн бұрын

"Companies make more money, which means more people have jobs" Yeah if I'll ever have my own supercompany I would pay people enough to buy just my own products, winning over 100 times the amount I spend.

@Sinaeb Ай бұрын

greed and lack of taxation of the richest

@Parakeet-pk6dl Ай бұрын

Rising prices don't hurt everyone, they make the billionaires richer. And that's the goal of the system.

@raquetdude Ай бұрын

Falling prices hurt everyone when it’s deflationary though in the system… so yeah ur point doesn’t make sense

@hewitc 25 күн бұрын

actually some billionaires get poorer. If they are no longer in business and have retired their capital becomes worth less.

@theshi3152 23 күн бұрын

@@raquetdude except it doesn't when companies can maintain profit. but the shareholders get less dividends so why would they ever want that.

@faraz1604 Ай бұрын

A little inflation is a good thing.. Emphasis on "little".. here inflation is reaching 10%

@Ganjor420 29 күн бұрын

So the whole thing evolves around the Idea that we need to encourage people to buy more stuff. What if... we just let people buy stuff when they need it? Sure the current system would collapse, but who cares? Keeping a flawed system alive just to keep the flawed system alive isn't a good reasoning.

@SeanMather Ай бұрын

Economics is totally made up, and we do an awful job as a society in making it work for all its people instead of the ultra rich. For example, if a company is making profits, why is it legally acceptable for that same company to layoff hundreds or thousands of employees? Doesn’t that break the cycle? Why aren’t wages forced to be given out in a more equitable scale, instead of the c-suite making multi millions but the poor front line employees are basically given table scraps? Wouldn’t having more wealthy employees keep the cycle going properly? Why aren’t interest rate changes raised in a targeted fashion, so that it hits the ultra rich individuals and companies that are often causing inflation harder then it does the unemployed families who need a loan just to keep their house? People would likely say capitalism, American values, or well that’s just how it works. But it doesn’t have to be this way. Economics aren’t some natural phenomenon like the tides. If people go away, so does the economy. We have the power to change it and fix it however we want to. The problem is that there is little political pay off to change anything and lots of reasons to keep the status quo. Call me a socialist, but it feels wrong that there are individuals who make more money than some countries while there are people in so called first world countries starving and homeless, not to mention all the rest of the world. How broken of a system is that.

@Rnankn Ай бұрын

But i continue to be baffled by why “creating jobs” is an answer to anything. Technology is supposed to be labour saving. We should aim to not work. Nature grows, and machines work. Humans should live. But the obsession with ‘jobs’ is just a social status that provides basic access to what nature makes for free. It only perpetuates the cycle of needless consumerism for the health of financial markets.

@RoldanRR00 Ай бұрын

There's a reason mostly sociopaths make it to the top of this system. They can't help but take it to its breaking point.

@jacobfrazier9582 Ай бұрын

@@Rnanknexactly this. Humans will always have to labor - we have to grow food and build shelter no matter what. But work for the sake of profit is literally meaningless other than to further the 1%'s god complexes

@ThePiachu Ай бұрын

"Inflation is good" but also having inflation-indexed wages is bad because that just drives up cost or something. So the whole system relies on workers being paid less and less while expecting them to spend more and more. And then we have the shrinkflation and everything on top of that because if the prices would keep creeping up a few percent a year people would lose their minds...

@JZTechEngineering Ай бұрын

Wages are going up faster then inflation

@aolson1111 29 күн бұрын

Wages have outpaced inflation for decades, now.

@JustHarrison 20 күн бұрын

I'm 39 years old and I have literally never ever, not once thought "I need to buy this now bc it will be more expensive later." Srsly psychopathic way of thinking.

@vipu6821 18 күн бұрын

Do you know who are the psychopaths? Big corporation CEOs, bankers and government officials, makes u think.

@feynstein1004 29 күн бұрын

How could deflation possibly be a problem when phones and computers have only gotten cheaper with time and yet people seem to be buying more of those than ever? 🤔

@ronanmurphy98 Ай бұрын

In other words, the central bank intentionally devalues the only accepted legal tender to encourage short term consumerism? And to protect the value of that sole legal tender, one needs to lodge it in deposit account in a bank that is regulated by that central bank, in order to accumulate interest to offset the inflation caused by that same central bank. Hmm 🤔

@spe3dy744 Ай бұрын

Breaking news, inflation still happens without a central bank

@ronanmurphy98 Ай бұрын

@@spe3dy744 Systematically targeted inflation? I don't think so. If the supply of a certain good becomes more scarce, or the price of the good is below what the market is willing to pay for it without reducing demand, then obviously it's price will increase. But that's not intentionally targeted inflation or the systematic devaluation of a currency. This form of continuously targeted inflation is unique to fiat currencies which invariably have a central bank.

@spe3dy744 Ай бұрын

@@ronanmurphy98 What you described is how inflation happens in fiat and non-fiat currencies, the central bank is just there to make sure it doesn't get out of hand.

@lesmurphy4441 Ай бұрын

Sort of, but that's not the driving force. In the US, all the incentives point to investment. Whether it's the stock market, real estate, or starting a business, the US economy rewards investment in the US. Inflation is a way of simultaneously discourage the hoarding of cash, and encourage asset owning. They want Americans to invest in "the system" and all the "carrots" pave the way.

@jonathangreenlee9805 Ай бұрын

@@spe3dy744 you said something wrong I will correct you! In all seriousness it depends on what the alternative system is. Like, any type of money is only worth what people think it is, man.

@ryansxt Ай бұрын

Inflation is just hidden taxation. The government ends up with more money (by printing) while devaluing your money. This is the same as just taking more money away from you via tax.

@SuperPlayz Ай бұрын

In theory your government isn’t trying to devalue your money, they are all competing with other countries trying to devalue each others.

@Hollywood041 Ай бұрын

Not really. But if you want to view it that way then it is a 2% tax in order to avoid companies arbitrarily imposing a 5% hike b/c 2qtr reports missed target Profit levels. It is a net good, in this version of Capitalism.

@wasing02 Ай бұрын

Not only is it a hidden tax, it's the governments way of spending without restraint. They can rack up massive national debt and then dilute that debt by inflation, effectively lessening the real cost of that debt.

@marl6908 Ай бұрын

That's not the reason. The reason is it's a fiat currency system and so they just print money.

@andreaberardi7003 Ай бұрын

To increase inflation all the central bank has to do is to print money, then hand them over to the government to finance public spending.

@user-kh9bn6hi7q Ай бұрын

It’s make believe so greed can exist.

@shoemakerleve9 Ай бұрын

Greed exists without the necessity of inflation or financial systems, I fact it is the opposite. They exist because of the inherent greed of people.

@aolson1111 29 күн бұрын

Will you give me your home for free? You aren't greedy are you?

@vipu6821 18 күн бұрын

@@aolson1111 Yes people are greedy, thats why we should not be using money that is controlled by people, because we know greedy people will use it for their own benefit. You think some small company boss is greedy when they try to do some little tricks to gain 2% more money? Wait until you find out would bankers and government get little tingles to try do little tricks too to gain also 2% or more.

@cembora4849 Ай бұрын

2% is our 10 day inflation in Turkey 😢

@user-yh1nm1vy3i Ай бұрын

I use the lira in my tires.

@MBarberfan4life Ай бұрын

Still, 2% inflation is incredibly high over just a decade.

@phoenix5054 Ай бұрын

@@MBarberfan4life10-day, not 10-year.

@Hollywood041 Ай бұрын

Be thankful you are not Argentina ? ??

@vipu6821 18 күн бұрын

So by the logic that these economists are talking about, thats even better because it gives people even bigger reason to spend right? RIGHT?! Why wait people to spend their money every few months when you can make them spend every week! Inflation is so good we all love it yes give it to us!

@MSCARRC Ай бұрын

Inflation is the expansion of the monetary base by the government (printing money). Governments justify their actions in times of crisis by offering bailouts, stimulus, or by passing "recovery plans", but they also do it a lot to finance wars. Nowadays, they expanded the scope of the money printing to pay all sorts of entitlements as well as to support the stock market always going up. That's the problem with governments and central banks. It's just too easy to print money and let everybody feel good on the short term while they get reelected, but they always blame someone else for prices going up.

@TTOS69 Ай бұрын

Government doing something about inflation? When? Oh you mean by adding to it by giving my hard earned tax money to a different country.

@TesserId Ай бұрын

It's a bigger scam than daylight savings time.

@JZTechEngineering Ай бұрын

Run an economy first

@prevosfr Ай бұрын

how did DST enter the chat when it wasn't mentioned orinvited? Stick to the subject at hand.

@twbroei9203 Ай бұрын

@@JZTechEngineeringyou cant run economy its a free world for anyone. Those controlling it are the ones making it hard for people to start a business wich is the foundation.

@grillygrilly Ай бұрын

I seriously don't understand people's problem with daylight saving.

@andrewn7365 Ай бұрын

@@grillygrilly Because those greedy time-hoarders should be daylight SPENDING and reinvesting in our time-conomy!

@Greennoob2 Ай бұрын

I wasn't taught any of this in school. That deflation chart doesn't make any logical sense to me. I'm also curious about why going below 0% is a challenge. I'm uninformed about economics

@alainchevalley5909 Ай бұрын

It is possible to go below zero. Japan, Switzerland, Sweden, Danemark and the Euro zone all did it. This is missing from the video, but the mechanism is the same, lowering interest rate encourage spending.

@elijahschnake3863 Ай бұрын

its a challenge because governments being net debtors have an interest in stealing from you, so they spend more than they tax which means there's an ever increasing amount of currency in circulation

@JZTechEngineering Ай бұрын

@@elijahschnake3863thats not how thst works, if the us spent 9000000099t dollars tommorow they would have to borrow it as the fed doesn't just give them money

@JZTechEngineering Ай бұрын

@@elijahschnake3863thst not how the gov works

@pritapp788 Ай бұрын

@@JZTechEngineeringin an ideal setting maybe. in a setting where most governments run massive debts which they want to inflate away, that is absolutely correct.

@DyrianLightbringer 26 күн бұрын

"Companies make more money..." How? If prices are increasing, companies charge more for their products, but they also have to pay more for their supplies, and they need to pay their employees higher wages so those employees can afford the increased prices. So... where are these supposed higher profits then?

@zwink37 Ай бұрын

Does anyone actually hold off on making purchases due to dropping prices though? A perfect example of this is computer parts ad new technology. The cost of a unit of storage or processing power has been declining for decades, same with big screen TVs where it used to be really expensive for a 50" TV and now you can get one that's better than what was on the market 10 years ago for half the price. Did that slow down people purchasing computers or TVs? Most consumer products have a pretty steady demand, but people will forgo certain expenses if prices rise too high.

@clarkcant Ай бұрын

This video was predicated on the notion that people spend more when prices are up and spend less when prices are down. Think about that for a minute.

@nothere2994 Ай бұрын

That’s not the idea. The idea is that people spend more now if they think they’ll have comparatively less to spend in the future due to inflation. As such, a small amount of inflation is good for the economy as it spurs people to spend rather than save. The deflationary spiral is people seeing prices fall, then waiting as they think they’ll get fall even lower in the future. This does happen (Japan is a good example) and it leads to stagnation as people hold off on spending if there’s not an incentive to. The basic idea is that punitive measures (losing value in your savings) work better than positive measures (giving people more purchasing power) to spur behavior.

@q.heffner3612 Ай бұрын

I thought the same thing like, they can't be seriously that slow

@zzzSargentzzz80 Ай бұрын

Can't believe what I just watched. Is this real life?

@user-zh1th8sz2l Ай бұрын

@@nothere2994 Do people really do that? That's the idea, sure, but that does really happen, or is that just another dubious economics notion? I guess if you're buying a car, or a really expensive appliance, maybe. I know I wouldn't do that. I would be pleasantly surprised, and take advantage and buy whatever I wanted to buy, in fact I'd pounce. The idea that the typical consumer response to surprisingly lower prices that would be bucking the inexorable tendency towards higher prices, would be to sit back and not buy, and gamble that they'd go even lower seems absurd. So I just don't believe that. That is not what consumers do when prices are cheaper. It beggars belief, quite frankly....

@daverapp Ай бұрын

It's also predicated upon the idea that employers pay more when they have higher profits, and only cut costs when profits slump. The businesses that do that are outperformed by the ruthless ones that do otherwise.

@gmclucy Ай бұрын

I reckon conventional monetary policy doesn't work anymore considering our current situation, because this logic requires logical actors without perverse incentives like our late stage capitalism megacorps

@JZTechEngineering Ай бұрын

Everyone has prwverse incentives

@justawhim Ай бұрын

@@JZTechEngineeringDepends, but what is meant here is that the incentives that drive corpos to act do not align with the well being of the economy or the workers as a whole.

@meganegan5992 Ай бұрын

Yeah, that's the problem with so much of economics: it bases its models on a dozen different faulty assumptions: rational actors, price or demand elasticity, stability of markets, or the complete ignoring of externalities!

@JZTechEngineering Ай бұрын

@@justawhim that how it has always been, and any economic system will have that issue

@justawhim Ай бұрын

@@JZTechEngineering Yes, however you do not have to settle for that as the best you can do do you? You can always reach for better. Try to better align the incentives with the people. But the problem here is experiments are expensive and costly and take a long time to see any results. That is assuming you are able to control for all the variables which you can’t for scales like this.

@Kian139 29 күн бұрын

This is a good representation of the excuses made by politicians who wants to manipulate the economy. Getting people to spend because of anticipated price increases instead of saving, may create demand, but it would be artificial and unsustainable. It ignores that when inflation becomes endemic and there is an expectation of wage increases, then that extra spending goes away and you a left with inflation. The really bad deflationary spiral only happens when the manipulation have become too extreme and the market needs to correct the manipulators. That will always hurt. Its the correction that hurts, not deflation itself. Natural deflation is good as you can buy more with your wages. We know that when prices goes down on something and people expect it to continue, they will not hold of on buying it - if they did they will never buy and never benefit from the good the purchase brings them. The idea that saving and not spending is bad for the economy is also false. Another way to describe saving instead of spending is investing instead of consuming. That is definitely not bad for an economy and the wealth of the population but the numbers may not look as good as the artificial numbers the manipulators desire.

@TTOS69 Ай бұрын

So inflation is a worthless number. Wages is the problem. We need more money for our time.

@vampcaff Ай бұрын

We all know why prices don't stay the same. Greed.

@Hollywood041 Ай бұрын

Did you recently watch Wall Street (1987)?

@trey4895 Ай бұрын

Prices rising is the result of inflation, not the cause & nor is greed. Creating new money out of thin air decreases the purchasing power of that money. Period.

@hewitc 25 күн бұрын

it's not greed. it's a fact of life. Have you ever been to an old restaurant that puts its old menu on the wall? In 1949 a steak dinner cost $1.50. Cocktails were $.25. Dessert $.75.