What is inflation? Economics explained

Inflation is one of the most important concepts in economics. It’s also one of the simplest. It’s just the average rate that prices are rising. A small amount of inflation is healthy for an economy - but how is it calculated and what happens when it gets out of control?
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#inflation #inflationexplained #costofliving #money

[@summersalt3629]

One thing stood out for me from this video: "If your income isn't keeping up with prices, you're getting poorer." Dang it, i'd soon be broke.

[@lordlemond1350]

That was a slight of word trick.. This is a capitalist economy correct?? Employers set the price of their product AND what they pay worker bees.. listen to any corp. earnings calls. Record profits while laying off ppl. Make it make sense.

[@fah45d]

No you won’t get poorer if you stop buying things you don’t need stick to things you can live without and save as much as you can even if it is a pound/dollar try it for a month and if it works do it every month

[@fah45d]

@@lordlemond1350economics will never make sense as it’s an instrument to increase and reduce economic productivity whenever they feel like it

[@AntonyCannon]

Not a single word on what causes it? What happened in Zimbabwe in 2008? What happened in Germany in 1920? How does it get out of hand? You say that it's seen as a good thing? How? How does it keep an economy growing? If one's personal income doesn't keep up with inflation, one gets poorer, is the same true of Nations? Is this a cause of infinite growth, or merely a symptom?

[@Patensfitness.com1]

this

[@Michalfx]

+Antony C I think the video would have to be a lot longer to explain every aspect of inflation. If you want, a single youtube search or just go on investopedia and it will give you educational videos on inflation and other economic topics, explaining most of the questions you asked.

[@Bushflare]

+Antony C I don't think th- (oh hey, I like your videos) they had time to produce a full video with graphics etc. To cover all of those subjects would be a pretty weighty task. I keep trying to phrase answers to those questions that are brief but none that really come close to the sort of depth necessary to really grasp the core of the problems therein. Those questions all deserve at least a good half hour to really see the full truth of the matter because whilst inflation is simple, economies are not.

[@desbest4]

We have inflation because the banks are releasing more money into circulation than they should. And then there is very well concealed reason behind it and that is to increase taxes without people complaining. Money that are issued as a loan by banks for example actually have no real value when issued. Only way the money can get a real value is if they are covered by actual work. So people have to work to pay them back and create the value of money that they borrowed. But when banks inject money into market that are not covered, suddenly people have higher buying power with no work behind them. And if the people have higher buying power with no effort at all, suppliers must counter this by increasing their prices so they make the same amount of money than before. Else they would not be profitable And thus inflation is born. And then there is the tax issue with inflation. If you get raise of 20% by inflation the problem that arises with this raise is the fact that you actually have same amount of money as before the inflation, but the tax base increases. So let's say your standard payout is 100$ for ease of our math. If you the say the tax was 20% then you would pay 20$ tax. Now imagine you get raise because we have inflation. The raise is 30%. So you now make 130$. But the income tax you pay now is 26$. Some people may now say that the tax is the same as before. That is true, but all prices rise because of inflation and in the end you have marginaly less buying power than before. It is so small difference that you won't even notice. But add 30 years to that and the difference will show. But then it will be too late.

[@Bushflare]

desbest desbest Yo, so let's say that exact situation occurs as you suggested it would. The only way that your buying power would decrease would be if the prices increased disproportionately to the worth of the money itself. If the money lost 10% of its value and the prices went up to cover that decline then the only way you would have less buying power is if you didn't get that raise in the first place, or if that prices on products adjusted to be worth more than they were beforehand relative to the value of the currency. If the values of the prices relative to the currency remain unchanged, and the percentage taxed remains the same, how are you losing buying power? I don't see how that affects things.

[@guest_informant]

That's a description - not an explanation

[@j_moni83]

No, inflation is an increase in the supply of money in circulation. A general increase in prices is a symptom of inflation, not an example of it. Inflation is only desirable to politicians who can boast about their records when GDP increases. But an increase in GDP is not a valid measure of prosperity. Quality of life is the best measure of prosperity, and that can hardly be quantified, which is why it's considered irrelevant.

[@sircurtisseretse3297]

That's right, Justin. The more money they print, the more the currency is devalued. That's why prices go up. And they give inflation a fancy name like QUANTITATIVE EASING. They like to say that 2 percent inflation is good for the economy. The money they print is given to certain people at the expense of those who have had their money devalued, so, in effect, it is a stealth tax. They tell you that deflation is BAAAAAAD. If you bury some cash for ten years during a period of inflation, it will be worth less. If you bury some cash for ten years during a period of deflation, it will be worth more.

[@RetoricaAntiga]

THANKS! That needed to be said

[@rickjensen2717]

Correct!

[@vienix7835]

is this correct

[@meisam14]

This video is a half-baked explanation that creates more questions than it actually answers. The creation and issuance of money, per se, only causes inflation if there is more money chasing too few goods. The question is: why does this happen in the first place? The answer: *The money supply is created by private banks through the process of loan making in the form of debt, and the amount of money created by banks exceeds the overall amount of savings in the economy and goes primarily toward inelastic goods such as the property and financial markets.* If money creation were restored to government there would be no need for inflation.

[@noel7777noel]

You are absolutely correct. Can I add? You said the banks exceed printing new money to feed the Ponzi Scheme investments. This increases in passive income creates inflation on active income. Well. Where do they converge. Let's separate passive income and active income. Basically investors treating active income businesses as a Ponzi Scheme. Well. What better things to do will money is to invest in a Ponzi Scheme. Trespass in the active income market. Investors having more passive income to throw around. Lots of new money to invest. To create new passive income. Not creating active income. Let's pinpoint. Even go slow to break it down. Find the exact spot the wheels come off this go-cart. For example. Let's start from the beginning. A starter business. A pizza business owner started his own company and ran it for his whole life. A active income. This owner perfectly balanced his checkbook. All ways saved for repairs to the depreciation value of his capital. To have money in his account to replace a worn out pizza oven or remodeling the dinning room every 30yrs. Even saved for his retirement the whole time. Say all that happened at $15 a pie. A awesome accountant he was. A balanced budget. After retirement, he GAVE the business to his kid Paul. The kid also balanced the checkbook perfectly and even saved for retirement. Also done at $15 a pie. Again a active income. Again a awesome balanced budget. Even though the business was GIVEN away to his kid Paul, both parties came out of the deal making money. A great living even with a retirement plan. Even just giving the business away. Now when the kid came to retirement age he didn't GIVE the business away when he retired. He sold the business to Peter. Peter the investor. Remember I already said Paul already saved for retirement at $15 a pie. Now with the sale he received from Peter, the passive income he received; a rather large severance package. A severance cost the new customer of Peter's are gonna take on as a added expense. Now active income PLUS passive income. Peter's new business he bought needs a return on that passive income. To pay back that business loan he used to buy that pizza business. Remember, he bought a old business, and capital goes down in value. Repair costs on old capital. And don't forget to add all the active income it takes to run a business in the first place. So now he needs to raise the price of the pizza to cover the now passive income business to $20 a pie. To cover the "investors" investment return. Plus repair costs of old capital. Ponzi Scheme investors causing inflation. The extra $5 per pie is to reward investors passive income. On paper math says a commercial busineses is to be given away. Not sold. The previous owner took his cut on every single sale of each pie. He took all his capital from each and every pie in his time running the company. No severance package was needed. The future capital sales belongs to the future owner. The future owner is to take his percentage of capital from $15 a pie. The old owner made a great living, was owed nothing. On paper where the wheels came off the go-cart.

[@MaryamKhan-vf3zo]

Thanks a lot for explanation.

[@danielc7165]

This should be titled - Inflation Described, not Economics Explained. However, I like the video, it does give a lot leads towards other topics that would better explain economics.

[@syl860]

this guy hella dumb

[@michaeltellurian825]

A rise in prices DOES NOT equal inflation...at least not in and of itself. In a market economy, supply and demand determine the value or price of something. Either of these two factors will raise or lower the price. This is NOT inflation. Inflation is something else and this video does not address it. Inflation is the ratio of money supply to the gross national income. The Federal Reserve Bank can and does regulate the supply of money by printing more or less of it and this is the factor that causes inflation, deflation or stability in prices. Economic policies determine the goals desired by the Fed and thus the money supply is manipulated to achieve the desired effect.

[@danielmichalski2436]

Exactly! I dislike the mainstream mambo-jambo on economics.

[@JenniferEmelia01]

Thank you

[@NicholasBall130]

Inflation, bank collapse, severe drought in the agricultural belt, recession, food shortages, diesel fuel and heating oil shortages, baby formula shortages, available automobile shortages and prices, the price of living place.

[@StacieBMui]

It has never been simpler to grasp how to expand your wealth than it is right now, thanks to the availability of competent portfolio advisors that can help you experience and learn about a market with a wide range of assets. I think it's impossible to predict how changing dollar values will affect assets.

[@StocksWolf752]

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[@cowell621]

Could you kindly elaborate on the advisor's background and qualifications?

[@StocksWolf752]

The advisor that guides me is Sharon Lee Peoples most likely the internet is where to find her basic info, just search her name, She's established.

[@johnbehneman1546]

THANK YOU SO MUCH.

[@ninjawarrior_1602]

A good one. I request you to if you could make an eloborated one

[@BestBenjamin-qv5ok]

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[@jaimecruz234]

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[@craigrobinson6455]

Getting Agatha Fernando to help me really helped me clear all my debts. I started with what I have left and it's been the best decision I ever made.

[@vaishnavvenkatesh4995]

it's nice. it gives a basic view. short and sweet I would say.

[@farahshyabillaas3598]

hi there, I'd like to ask for permission on 'taking' or borrowing your footages to be included in my educational-purposed video that would be one of the economics class assignment. I will surely insert The Guardian in the credits. thanks! :)

[@bankrollkaine]

A now it cost 10.99

[@YamatoXion]

....thank for that, I guess...

[@Unknownenterprisesltd]

0:13 DeviantArt in a nutshell

[@Nonedless]

summary: printing money just makes 1 bill worth less.

[@sriharitheerthagiri6196]

Dear lovely boss 🙂

[@user-jw9en6lv4q]

Hi I'd like to ask for permission to use or borrowing your video to use it on our project in TCW. I will post it on our Facebook page for educational purposes only. Thank you

[@J040PL7]

But is inflation needed? Why can't we just keep the currency at the same value? And why does it only happen to money? For example, the same wouldn't happen if we used gold as a currency instead. Is inflation a ploy that the government uses so people don't get rich off of savings?

[@ma2i485]

I think inflation is needed in a debt based economy since the financial system is based on Fiat currency and not Gold the inflation is at the core of the system since fiat currencies are driven by debt monetization hence the rapid increase in debt in the economy. So debt is the cause of inflation spiraling out of control because fiat currency has unlimited supply unlike Gold. This is why governments becoming bigger and thus leading to bigger budget deficits and rapid currency devaluation

[@ma2i485]

This is my basic explanation. Watch any video or read any book by a Austrian Economists..you will understand why inflation is necessary for the economy to grow but at the same time destroying future purchasing power of the currency..its a double edge sword.

[@danielmichalski2436]

I believe so. They don't want people to be wealthy, because then they would have time - to think, to learn, to change the world in matters that are civilization-wise worthy, oh, and they would be free from this toxic slavery system ;)

[@lordlemond1350]

Bingo! 3/4 of congress are millionaires and some even billionaires. Fed chair himself is worth $50 mil. Companies control prices and wages…so why is the inflation arrow aimed at you, the worker. 🤔🤔🤔🤔

[@lordlemond1350]

@@ma2i485 debt is avoidable, preventable, arbitrary. US gov has been in perpetual “debt” for more than half a century and Feds print money for breakfast.. sends much overseas, most to the military, and pockets the rest. But you… you get to face down 23% variable interest rates, garnished wages, & even jail. “Debt” is not a real thing. It’s a money grab and anytime you get close to getting out that hole.. INFLATION!

[@unknownuser6757]

Prime should not be $10!!!

[@TheFuture-ub4du]

this was a waste, a waste of time!! 😡

[@ILoveMyHubbyHanks]

pyrocynical would love this

[@Bk77183]

big mac is like 5-6 bucks here in ny now lol

[@insomniac9951]

Here in Turkey it costs 200tl

[@chinmoydas2955]

Did not understand anything madam....can u explain it more simply??

[@danielmichalski2436]

because it's nonesense :D inflation is the supply of money to the economy - done by banks and politicians.

[@mass2293]

3.99 for a big Mac!! Wow

[@ivo7411]

Who else watch this vid for Ms.Taylor class

[@monstrositylabs]

lol. The Guardian creating an economics video!

[@BennyCFD]

Hmmmm...............Even simpler. Inflation of too much money following too few goods.

[@truptishettiyar2211]

At the start of video I thought it's an McDonald's ad

[@gideondavid8944]

This is not understandable to an ordinary man.

[@Frosty-273]

8 years ago, i am here from 2024 where everyone is drowning... please save us 🙏

[@user-ot1dv6ri4f]

didn't actually say why it exists

[@lingxinru6777]

So if pay do not increase with inflation mean end of the world for us?

[@Angela-cc1hd]

As l understand it in very simple terms, it's because of the huge profits companies have made and that has in turn pushed up prices, the Government took the caps off certain companies and those who deliver our utilities so they were then able to charge what they like, the knock on effect was everyone then in business put their prices up, it was and still is a free for all to do as they like?? So all roads lead to Rishi Sunack and his Mates!!!! 🤔🤔🤔 This is only my humble opinion😊

[@tablespoon1277]

The audacity to publish such video is admirable

[@andybray9791]

Ask a boss for a raise? no

[@jimmysweat2200]

Lmbo 🔥

[@chicosonidero]

We need price control to curve inflation. Since they are not the ones who raise prices, poor people do not cause inflation. Let those who cause inflation and can afford it shoulder its cost.

[@chicosonidero]

That is what justice as fairness means.

[@danielmichalski2436]

Agreed. Normal folks don't have the power to lower inflation or increase their wages by themselves. Of course, who would be trustworthy to have such power? Then again, why are banks trustworthy?

[@user-hu3iy9gz5j]

Prices on goods are raised because they can be and must be raised in a situation after considerable amounts of new money has entered the economy. Any other decision would do inflict harm upon the company The state and the central banks cause inflation when they expand the supply of money and credit.

[@chicosonidero]

@@user-hu3iy9gz5j Economics is fundamentally a normative human discipline. If the amount of money increased, the best way to deal with that for the benefit of most people is to increase the availability of goods that can be purchased, not to increase their prices.

[@majestic7768]

It's a bubble economy.

[@tUBEROCKErPriyankar]

Showing condoms for examples!

[@gregorydavis8699]

Save your money so you can have an emergency fund. I think the purpose of inflation is to keep people working.

[@user-od8ul4mw6d]

BUT WHAT IS INFLATION WHY DOES IT HAPPEn

[@without9103]

ok, that explained nothing.

[@pietervanderweele7265]

What a bad video, didn't expect anything better from the guardian though

[@madzen112]

Zimbabwe, the country with the most trillionaires

[@bourbon369]

vietnam😅

[@creativity2598]

Its time to get a 2nd wife and get her working too

[@fah45d]

My little one he’s only 4 can explain economics to you so that’s not what we need instead we need to stop buying anything that’s gone up in price so these thieving companies can inevitably go into administration

[@user-hu3iy9gz5j]

The companies are not "thieves". When a company experiences either higher consumer demands or higher production costs, it is practically speaking obligated to raise prices in order to survive

[@ReflectingMoon]

​@@user-hu3iy9gz5jthen companies should not have the record profits they are having

[@tgw230]

How about why inflation happens? Useless video

[@zhongxinaqing3376]

I hate AP

[@CM-di9lg]

Colored condoms?

[@Tash2407]

Terrible attempted explanation