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by PaulDavisThe1st
1492 days ago
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The Fed can't do much at all to stop corporate-controlled price increases. Increasing interest rates makes it more expensive to borrow money, but that has little impact on a company choosing to bump its retail prices by 25%. M2 is only relevant to a point. The increase in the money supply does not, in and of itself, cause any change in prices at all. Individuals and corporations have to make explicit decisions to respond to what they can see of the M2 effect, and none of these decisions are a law of nature. Rents don't have to go up just because M2 grew. Landlords sense that they can, and then they choose to do so. They could choose not to do so, too, but they don't because we're taught that this would be irrational, or something. |
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The law is called supply and demand. If there are more dollars and the same amount of resources, the value of a dollar goes down.
Let's just agree to disagree. Cheers.