I did a quick google and it said because demand is out stripping supply for goods and services. I would have thought supply and demand was never static at any time. Why is it a massive issue now? Supply and demand of what exactly? I understand food price going up but how does that relate to the value of currency? If a recession hits us will it cause inflation to go down because people aren’t demanding as much? Do more people have more money causing higher demand? Thanks for your expertise
In: 43
For capitalism to work, people have to be SPENDING more money than they save. These expenses are supposed to go into lots of different things such as supply for goods and services but a lot of the cost of living is bills for the private sector.
And wouldn’t you know, the private businesses getting the money from the bills aren’t spending more than they save. A business spends money by purchasing whatever they need to keep the business running. Also paying their employees to match the times. But as that isn’t happening the money gets taken out of the economy’s cycle and the pressure is on everyone else working a job to keep it going.
Everyone is burying their heads in the sand hoping it’ll all get better. That’s why there’s not a big backlash to the housing crisis or the new air bnb problem, because all that money is supposed to go to home owners not private entities.
But a lot of those people aren’t spending money either. A recession is on it’s way and nobody seems to be doing anything about it and everyone is pointing their fingers at someone else. Predictably the government needs to step up but it is tough to sympathize with people whose lives don’t impact you and having an air bnb or three and just seeing that money disappear because people with less money than you complained louder isn’t likely to ease off the blood pressure.
It certainly isn’t easing off the inflation.
Latest Answers