Inflation

Philosophy Forums Society, Government, and Economics
1

Why is inflation happening?

Because interest rates are too low.

Oh, I see. It’s not because there is a recession in the world’s GDP (probably because of a series of artificial distortions, but that is neither here nor there), meaning a decrease in overall economic output, meaning less ressources, and an increase in the price of oil of about 300% due to sanctions on a mayor oil producing nation, oil being a mayor necessary component for every stage of production in every industry, meaning the cost of that decreasing pool of ressources actually goes up.

No, it’s not that. Not that at all.

It’s the interest rates.

2

K: ok, walk us through this theory of yours… how does the interest rate
cause inflation?

Kropotkin

3

The price of oil is causing inflation.

I felt I was clear, but maybe your abilities are less than mine. Which part was unclear?

4

For public interest, because it is now hitting me that these economic warriors of the left may not be aware of this,

The Federal Reserve of the United States, as well as central banks around the world, are hiking interest rates for their loans in an effort to reduce inflation. The theory that low intrest rates are causing this montrous inflation we are seeing is theirs.

5

Evidently, if it costs me 10$ to buy a trinket to sell it in a store, and the cost of oil, which is necessary for many stages of the production of that trinket, increases by 300%, then it now costs me more than $10 to buy it in order to sell it in my store, and I have to raise the price I sell it at.

How are we doing so far? Rocket science?

6

The price for your war on Russia is 8% inflation.

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7

As a note, the interest rates for all of the bars in that chart were the same.

8

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I watched this earlier today… very reflective of this topic… the market has remained unstable since the 2008 world recession when banks started printing money.

[youtube]https://www.youtube.com/watch?v=tFjGkaquE6o[/youtube]

9

It’s funny, I both intensely hate and love that guy.

He’s a communist, but he’s honest about it, so it gives a coherence of thought that is unparalleled in communist circles and he sometimes catches things that are important.

I can’t watch the video though. I am turned off by excessive enthusiasm.

10

I am going to assume that his thesis is that oil prices are being artificially sent through the roof, and this is causing a massive inflation that is hurting everybody. I agree.

11

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Yea… his over-enthusiasm did overwhelm my system, but the topic was too compelling to stop listening.

I’ll transcribe his main points, here… they are similar to my thoughts regarding the current economic situation, and probably to your’s too.

12

I got over myself and kept watching. I see he goes on to say that the Federal Reserve, by acting like interst rates are the cause, and not the massively distorted price of oil (and he even mentions it’s because of a war on the oil industry, which is true, a lot of people justify the sanctions on Russia as a further blow to carbon fuel, but of course, in practice this means that the cheapest option for energy we have is being inflated and all prices must go up), are adding to rather than helping inflation and the general decrease in purchasing power of people.

13

He is also correct that, while leftist lunatics like Peter Kropotkin might like the idea of reducing carbon, the energy industry itself is having a ball, because #1 their prices go up, #2 they are the people the government hires for their lunatic wind turbines and #3 the regulations prevent everybody that is not an already supermassive player in the energy industry from giving them competition.

14

I’m done with it, I can’t deal with his whiny rhetoric about the rich and the poor. I leave the floor to you, I am still interested in any points he has to make.

15

We will make a brief pause here to note that there is a 0 emission energy source that is many times cheaper than oil, which lunatics like Peter Kropotkin have made practically illegal, which is nuclear energy.

16

origami: Why is inflation happening?
Because interest rates are too low.

K: Ok, here is one suggestion for inflation…

O: Oh, I see. It’s not because there is a recession in the world’s GDP (probably because of a series of artificial distortions, but that is neither here nor there), meaning a decrease in overall economic output, meaning less ressources, and an increase in the price of oil of about 300% due to sanctions on a mayor oil producing nation, oil being a mayor necessary component for every stage of production in every industry, meaning the cost of that decreasing pool of ressources actually goes up.

K: ok, here is another suggestion…

O: No, it’s not that. Not that at all.
It’s the interest rates.
[/quote]
K: and the very first suggestion is then denied… it is back to the interest rates…
I would suggest that any confusion here lies with you…

the second part is this, I would be very, very careful to attribute
inflation to one reason and one reason only… for you, interest rates…
by no means am I an expert, but for example if one were to say,
the ''GREAT DEPRESSION" was caused by the collapse of the stock
market, one cause, is to miss what really happened… the
Great Depression had a dozen causes, in which the collapse
of the stock market was the final straw that broke the camel back…

To attribute anything to one cause economically is to miss the
overall connection that is the entire economy… interest rates are
certainly part of the economy, but only a part…
we can suggest that our current inflation has a dozen of reasons,
including supply chain issues, greed of corporate America, the
''great resignation" in America… to name just a few connected reasons
for the current inflation…

to blame inflation on the war in Russia is to, once again, to
be fixated on one cause and one cause only…inflation doesn’t have
just one reason to happen, it takes several reasons to cause inflation…

Kropotkin

17

Ah, so you did understand, you were just pretending not to.

I am sure everybody here is surprised.

Let me see if I understand you. You are saying that a 300% increase in the price of a good that is essencial to almost every step of every production process will have no effect on inflation? Is that right? It was all because intrest rates were too low? Am I correct?

18

K: and how many people live within 20 miles of Chernobyl?
or how much damage has the Fukushima nuclear disaster caused?

yeh, I am lunatic for not wanting to be die because of a nuclear
catastrophe even like Chernobyl or Three Miles island in 1979…
according to officials like the United States government
Accountability office, which has reported more than 150
incidents from 2001 to 2006 of nuclear power plants not
performing within acceptable safety guidelines and according
to a 2010 survey of energy accidents, there have been at least
56 accidents at nuclear reactors in the U.S… (incidents defined
as either loss of human life or more than US $50,000 of property
damage… so, yah, lunatic… for wanting safe nuclear power plants
I know, I am pretty darn hard to please…

Kropotkin

19

Sure inflation has many causes. You look at the ones you are causing that are doing the most damage.

How much dmage are interet rates doing?

Well, considering that they were low for many years duting which inflation was low, very little. But they go with that and change them.

How much damage is a 300% spike in the price of oil, directly attributable to sanctions on Russia, doing?

A fair amount. Clearly. It shows in the chart, and is obvious, because if a main component of every step of production goes up 300%, everything is going to cost more.

So they go with that and remove the sanctions.

Wait no.

They wipe their ass with people’s money and keep a nebulous war that nobody understands going and the price of oil stays at $120 a barrel, where mere months ago it was at $60.

20

50 people died from the Chernobyl meltdown.