[acdha]

A lot of the inflation seen in the U.S. is corporate profit-taking such as when the automakers used the chip shortages to steer buyers towards the highest-end models they prioritized for production while less profitable models were back ordered.

That matters because cryptocurrencies don’t help at all with the inflation consumers are seeing, while adding more personal risk and an exchange rate to arbitrage.

[psychlops]

You have an interesting worldview. Corporations take profits to pay their employees. They do this with or without inflation and always have.

How would a crypto "help" with inflation? In the same way the Dollar "helps" with the inflation of the Euro?

Cryptos don't add to personal risk, people do that. If you think cryptos are making an impact, you should understand that the entire crypto economy is a rounding error in inflationary impact.

[acdha]

I think you misunderstood the point: when a large portion of the cost increases are due to companies raising their profit margins, changing how you pay for it won’t affect that.

[nprateem]

Unless you're planning to pay for it with an asset whose value fluctuates wildly.

[acdha]

That’s a separate factor, though. It’s definitely one of the reasons why cryptocurrencies never became popular but in the case we’re talking about it’d just be making a bad situation worse rather than the cause for it being bad.

[salawat]

Profit is not taken to pay employees by definition. Profit is gross less all liabilities. Liabilities include payroll. Payroll is revenue.

[umeshunni]

That's not how inflation works.

[acdha]

It is. If you’ve never learned economic except from cryptocurrency marketing material, inflation simply refers to the prices of goods and services increasing, not any one specific cause. That can happen due to real changes in demand or supply, government policy changes, or other factors like changes in the labor market. It’s key to understand why inflation is happening because that tells you both whether it’s a problem - almost all serious economists think modest inflation is good for keeping the economy moving – and what kinds of fixes might be needed. For example, a crop failure will cause a spike in prices but if you don’t have reason to expect a late frost to happen again you probably don’t need to make structural changes; if some industrial component costs more because mines are running out, you might need a larger intervention.

In this case, prices went all over the place during the pandemic and the question is how they recover – companies are a lot quicker to raise prices than lower them and if you look at the business press there were a lot of record profits reported - the most since the 1950s when American companies were reaping the profits of uninterrupted production capacity selling to post-WWII Europe:

https://www.bloomberg.com/news/articles/2022-08-25/us-corpor...

The St. Louis Fed estimated 60% of the inflation in 2021 was profit-taking:

https://www.npr.org/2023/05/19/1177180972/economists-are-rec...

The story in Europe is similar with roughly half:

https://www.imf.org/en/Blogs/Articles/2023/06/26/europes-inf...

[ryan_lane]

That's _part_ of how inflation works. The current inflation cycles is numerous different issues compounded (corporate profit seeking, money printing, supply chain issues, extremely high employment rate, pay increases). I know crypto bros like to say it's only money printing, so they can point to their fake money and say "you can't print money here", but the world isn't so simplistic.