Prof. Thomas J. DiLorenzo: Who Really Benefits from Inflation?
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- Опубліковано 24 тра 2024
- Who benefits from inflation? This is the question Prof. Thomas Dilorenzo asks. Thomas James DiLorenzo (born August 8, 1954) is an American economics professor at Loyola University Maryland Sellinger School of Business.
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The rich benefit by using fake, printed money to aquire assets while debating the value of the common people's financial assets.
Cantillon
0:06. I was enthralled until he called the Fed the f-e-d
Who gains most from inflation? Borrowers and the biggest borrowers gain the most so long as their bankruptcy does not occur 1st.
Most countries' biggest borrower is each of those countries' own governments Creditors can not force governments into bankruptcy, but if government's debts relative to GDP grow too large, other countries can require more of the laggard country's currency in exchange for its own. This amounts to a write down the laggard's assets, which works in a way as a bankruptcy mark-down.
If a country's currency is a reserve-currency as the USD is now, that country can soon find its currency no longer the reserve-currency
Losing its reserve-status has yet to happen to the USD. Right now, despite many factors weakening the USD, more factors weaken other currencies, o for now most countries and their banks prefer to hold the USD It is simply the only such widespread currency that is also less flawed than others. Switzerland has a stronger currency but CHF's are a relatively rare currency so it is not about to supplant the USD.
A nutral asset is being implemented. Griffins law is inevitable.
There are a few points i would like to point out to, the VAT is often based on a % added on top of the original price, so if the original price goes up so does the VAT so the state actually sees more money rolling in.
There is one more point i would like to adress as well, we have often heard the term "the boom and bust cycle" yet no one seems to be talking about that as far as i know at least. If we take the 2008 crisis as an example, very low interest rates this should cause inflation, and it did, in the housing market the prices of houses were just going up and up, so even more people jumped on that wagon to make an easy buck, further growing the housing bubble, untill the house came crashing down, the bubble burst and i guess all of us were around to see the fallout of that.
But now to my actual point, inflation grows those bubbles, expanded money supply, people want to invest and something gets invested in more then others and it looks like its a ripe market for cheap and easy profits. This takes me back to the great depression just prior to the depression, we had vert high inflation rates, 10-13% per year and what did people invest in, yes that is correct the stock market so it seemed like it was a sure way to make an easy profit but that is not the case, what we did actually get was the great depression.
Now people will ask, why doesnt that happen in other countries then? The other countries didnt have people investing money to make a profit, they were just trying to survive, and in such an atmosphere its stablle prices on food increases producers wants to produce more,, this works for some time. They were not buying food to sell it 6 monthss later at a profit, they could barely afford to eat just today.
Inflation is the great cause of the bust and boom cycle which is its effect.
I think you're talking about debt, which is related to inflation.
I think of debt as the great cause of boom and bust cycles, and inflation as a measure of prices in the economy.
Availability of debt increases prices in the market it's being used, because it stimulates demand.
The USA was founded as a property owners' democracy, and as a great experiment in Capitalism.
Establishing prices for land and creating a government with a mutual conflict of interest (increasing the productivity, and cost, of the land) were part of the same project. Also, a completely deregulated banking sector!
What a recipe for creating booms and busts! (And collapsing into Civil War.)
Many of these structural issues plague the USA today, and if you think house prices are the way they are because we allow a certain group of people to vote their property values into infinity, starting at the local level, I wouldn't blame you for taking a political angle on the problem.
It seems that the USA is an outlier for booms and busts, and structurally there's clear reasons why.
@@ywtcc It is simply how i look at it, the higher the inflation in a certain area the worse the busts so to speak.
This is because people take out loans to invest into that market with what they think will give them more money in the end. The reason they do that is because during inflationary periods money is easy to come by.
The banks operates under a minimal treshhold of security, meaning they need to keep roughly 10% of the deposit as safety for the deposit, and they can lend the other 90% away. The reason why the USA is at the fulcrum of the boom and bust cycle is because USA is highly integrated with other smaller nations economy in a myriad of ways. Through loans, investments, securities etc etc, and when a bust happens they can no longer give out loans or securities so the other markets follows.
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find "ten things you should know about socialism" by Thomas, very interesting 😊
I think inflation due to UBI would look a lot different than inflation due to bailouts.
The view of inflation as a general increase in prices is problematic, because we never observe that kind of inflation directly.
What we observe is particular increases in particular prices, then we infer generalized increases.
The mechanisms of such particular increases are relevant, so long as you're interested in reality.
Which some economists clearly aren't.
That's why you gotta invest! Stocks and real estate.
So how is this happening ?
30 years worth of goverment stimulus in 2020 alone gives us a fair amount of inflation
The definition of inflation is increase in the money supply. Price inflation is a result of increased money due to supply and demand.
If the bank sent $1M to everyone in the US in alphabetical order with a new letter every week, after 1 year, the people whose names began with an A would be doing a lot better than the people whose names began with a W.
How about, how to prepare for a Depression?