Economists Radhika Desai and Michael Hudson explain the reality of inflation.Drawings and animations by Giandavide Locicero at Pomona PicturesPomona Pictures...
So that was a load of crap that doesn’t go into the causes of inflation. Here’s a brief summary of how inflation actually works:
Inflation is when the value of a good grows IN PROPORTION to the value of money. Yes, both things have value independent of each other, and as such, we can see supply driven inflation if a country’s currency is devalued with respect to other countries, as it makes it difficult to import feedstock.
There are two primary causes of inflation: supply driven inflation, and demand driven inflation. Supply driven inflation is when not enough goods are produced, as with covid supply chain disruptions. Demand driven inflation is when demand grows with respect to supply, as with using graphics cards to mine bitcoin.
It should be noted that even these are market forces caused by suppliers and consumers, suppliers and consumers themselves don’t directly set prices. The people who own the suppliers do. They must read and manipulate market conditions in order to get the most profit out of their product.
During covid, we have had supply driven inflation due to supply chain disruptions, and hoarding to a lesser degree. However, when these issues have been resolved, we haven’t witnessed prices going back to normal. This is because the bourgeois have successfully read and manipulated market conditions.
In a way, what the bourge has done is a variant of the application of the mass line. They saw that material conditions had forced consumers to acclimate to higher prices, making the conditions ripe for another price increase. So that’s what they did, then they sold it as the new normal.
So that was a load of crap that doesn’t go into the causes of inflation. Here’s a brief summary of how inflation actually works:
Inflation is when the value of a good grows IN PROPORTION to the value of money. Yes, both things have value independent of each other, and as such, we can see supply driven inflation if a country’s currency is devalued with respect to other countries, as it makes it difficult to import feedstock.
There are two primary causes of inflation: supply driven inflation, and demand driven inflation. Supply driven inflation is when not enough goods are produced, as with covid supply chain disruptions. Demand driven inflation is when demand grows with respect to supply, as with using graphics cards to mine bitcoin.
It should be noted that even these are market forces caused by suppliers and consumers, suppliers and consumers themselves don’t directly set prices. The people who own the suppliers do. They must read and manipulate market conditions in order to get the most profit out of their product.
During covid, we have had supply driven inflation due to supply chain disruptions, and hoarding to a lesser degree. However, when these issues have been resolved, we haven’t witnessed prices going back to normal. This is because the bourgeois have successfully read and manipulated market conditions.
In a way, what the bourge has done is a variant of the application of the mass line. They saw that material conditions had forced consumers to acclimate to higher prices, making the conditions ripe for another price increase. So that’s what they did, then they sold it as the new normal.
TBC