[fbonetti]

You’re only looking at one side of the equation. Assuming demand stays constant, if you reduce the number of tomatoes, their price will go up. Likewise if you increase the number of dollars, the price of tomatoes will also go up, because each individual dollar isn’t worth as much.

[TheSpiceIsLife]

That only matters if people are prepared to pay more for tomatoes, which I don’t think they are as evidence by inner-city real estate prices going up way more than the price of tomatoes in inner-city groceries.

On the whole people are drastically more interested in paying more for real estate / assets / buying or starting a business than they are in giving dollars to tomatoes producers.

Tomato producers will take whatever they can get at market, because the produce is perishable, whereas real estate vendors can (usually) afford wait to for a greater-fool with deeper-pockets.

[fbonetti]

You're missing the point of the example. Substitute tomatoes with something with a long shelf life, like Spam. It doesn't matter. The point is that the people utilize leverage (loans) in order to fund investments that will yield a return greater than the interest rate paid on the loan. People don't use leverage to buy milk, cigarettes, and gasoline, which are the types of goods tracked in the Consumer Price Index (CPI). They use leverage to buy assets. So when people say that inflation has been low despite the unprecedented amount of money printed over the last 10 years, they're only looking consumer goods and not assets.

[TheSpiceIsLife]

Oh, sorry, I think I read for previous comment in the wrong context.