How come we experience so much more inflation than deflation? in other words, why does our buying power decrease far more often than it increases?
How come we experience so much more inflation than deflation? in other words, why does our buying power decrease far more often than it increases?
You're viewing a single thread.
Debt is what drives inflation. Let's say you got a total of 1k USD in circulation. Now, let's say that some person decides he needs to borrow 100 USD from the bank. The bank gives him the 100 USD, but with intrest. Let's say that that intrest is 10 USD. So, the person gives back the 100 USD plus 10 USD intrest. But, there's a problem. If a total of 1k USD is in circulation, where do the 10 USD come from. It can't come from thin air, so it has to be printed. Thus, now you have 1.01k USD in circulation which inflates the prices of things.
There are other reasons as well. This is all well explained in Zeitgeist. I suggest you take a look at the documentaries.
Eh, I think you need to rethink this, as this is nonsense. Maybe you forgot some steps?
Why is it nonsence? It makes perfect sense to me 🤷. Granted I may not remember everything correctly and other things that were explained in Zeitgeist, but I think I remeber this correctly.
Because the 10 USD are not created from thin air but taken from the 1000 USD in circulation and transferred to the bank.
But it is true that the bank's ability to conjure up the 100 USD debt even if they don't actually have all of it contributes to inflation, so I guess your source might have gotten it correct, but you clearly misremember the details.
That may be true... I did watch the documentaries a long time ago.