Why is everything so expensive? We look at what causes inflation | ABC News
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- Опубликовано: 24 июл 2022
- Inflation is reaching record-breaking highs around the world. What causes inflation and what can be done to control it? Rachel Pupazzoni explains.
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Waiting for my 10% increase at work to agree inflation is a good thing 🤣
Make it make sense. 10% increase but everything else is rising in price so essentially it cancels out
@@dhuncho6050 Literally algebra.
This doesn't address quantitative easing or pandemic stimulus as causes nor does it acknowledge that the inflation now is more widespread - for instance coffee shops increasing prices 20%
They increase. You pay. BUT if you NOT PAY, they decrease….. ! Solution , don’t effing pay. Simple….
Stimulus checks had next to no effect compared to the trillions they handed out to wall street and corporations.
They did mention both stimulus and interest rate decreases as key factors for driving the demand side
Well said! I am also here to learn how to invest after listening to a lady on tv talk about the importance of investing and how she made 7 figure in 3 month, somehow the video taught me nothing and left me even more confused, I'm a newbie and I'm open to ideas on how to invest for retirement
@@rajeshupadhyay5683I'll suggest you lookup Teresa Jensen White, this is her name online, she's now the real investment prodigy since the crash and have help me recovered my loses
You miss the bit where the Govt printed a trillion dollars and the US Fed printed 9T
And being reserve currency of the World.
40% of the USD in circulation was printed during the plandemic.
You can't just double your bank account without halving the value of its buying power
@@xx-lk3bx It doesn't hurt that essentially all oil contracts are priced in USD.
@@adamdymke8004
Russia and China putting squeeze on that arrangement
Bingo
In summary, things are bad and things will get worse and things might get out of hand if this man continues. Worse is our government pretends like they don't see it. I for one has been hit very hard and at this point, I am more interested in a solution because I don't think an end is near. What is the way forward for the less fortunate ones like me? How do we survive this phase? I am slowly losing my mind.
Practical approaches: Vote wisely, Spend only on necessities, Pay attention to your health, Try to spread your assets (locally and internationally)but of course, you have to be well informed on the right ones or better still, get a pro to handle it for you (that way, you save time and minimize risks). . Made my first million this way earlier this year (got help though). Can comfortably wait out this "phase".
@@marlenaaj Amazing approach though its quite not that easy... What do you mean by you got help? I could definitely use help right now as my finances are in a mess. I look forward to your reply
You are creating a lot of unnecessary tension for yourself. Its not that serious.
@@trishawallor Funny enough, I can honestly relate and nobody said it was going to be very easy. I don't know if I am permitted to drop it here, but her name is "Leah Marie Sandock". Was in the news a lot in 2018. You can check her out online for more.
@@marlenaaj Wow I know this little lady. Once attended a seminar she was also in attendance in Vancouver,, She's American though, I doubt she works with foreigners,,,
Every crash/collapse brings with it an equivalent market chance if you are early informed and equipped, I've seen folks amass up to $1m amid crisis, and even pull it off easily in a favorable economy. Unequivocally,
I do not disagree, there are strategies that could be put in place for solid gains regardless of economy or markt condition, but such executions are usually carried out by investment experts or advisors with experience since the 08' crash>
this is quite huge ! much more info needed please, what did you invest in ?
Impressive, i’ll most definitely check her out. I buy the idea of employing the services of a Financial Advisor because finding that balance between saving and living requires counsel.
Its what happens when your currency value is dictated by stocks and confidence instead of actual exchange value. Thanks Nixon
I'M NEW TO BTC AND I'VE BEEN MAKING LOSSES TRYING TO MAKE PROFIT MYSELF IN TRADING...I THOUGHT TRADING ON DEMO ACCOUNT IS JUST LIKE TRADING THE REAL MARKET... CAN ANYONE HELP ME OUT OR AT LEAST ADVICE ME ON WHAT TO DO?
That is true, you need an expert trader to make good profit from cryptocurrency trade
And this is the perfect time to invest in cryptocurrency because of the rise in cryptocurrency.
Trading with an expert is the best strategy for newbies and busy investors who have little or no time to monitor their trade.. I will advice you to stop trading on your own it's very risky. Seek advice of a professional trader.
How can someone know a professional trader that is trustworthy when legit ones are hard to find this days.
💯💯💯
Media outlets including ABC are presenting the situation as "pretty normal" , instead of asking genuine questions about the supply chain and retailer business structures/practices in Australia. Are these people really trying hard to stop a "Sri Lankan" style protest by general public here in Australia?
Lies again? Institute College
*past 10-20 years of no wage growth
It’s an attack to weaken middle class. We will see more and more rampant poverty and amongst the ones who work several jobs to keep the ends meet!
Inflation is the increase in monetary supply. It leads to the increase in prices, not vice versa. To reduce inflation, central banks need to print less currency.
And increase the interest rate. What is the real inflation in Australia, not the dodgy figures?
That's not really true. Yes, you can create inflation by printing money to pay for government spending, injecting more money is chasing after the same number of goods.
However all thats really necessary is for demand to increase relative to supply. That can be a results of increasing the strength of your currency, a supply shock providing fewer goods for the same demand, a disease or union collapse suddenly alters that supply of labor etc.
That's not true for all circumstances. For supply shock, no amount of crimping money supply would lead to less increase in prices. The shortage of supply of goods is simply a free market's way of dealing with new circumstances by finding a new equilibrium point that will suit both suppliers and buyers. Central banks need to guarantee that there is enough money in the market to clear transactions, and that it doesn't cost too much to do so, else it impinges on business deals.
On the other side, as @Adam Dymke has mentioned, governments spending more than the market capacity could handle will be inflationary, i.e. competing with the private sector by paying more for human resources, services and goods.
This is 100% true. It is the only factor that creates sustained inflation. Supply v demand creates short term ripples. QE causes the inflation of asset prices leading to housing and rent being more expensive and stock markets to become overvalued - especially in a low interest rate environment. The RBA kept easing way beyond the need to - by a least 6 months. It may surprise some people to know that the RBA was still buying $4B of bonds per week in February 2022. Now it's causing widespread pain by having to raise interest rates to compensate for it's mistakes. Rinse and repeat.
@@fisherfriendman This isn't strictly true. Increasing interest rates increases the cost of your currency relative to everybody else, which increases your purchasing power and reduces foreign demand for goods you export. In effect, you export your inflation to your trading partners, which reduces inflation on your end even in the event of a supply shock. This is effectively what the US is doing right now. As their interest rate rises, their dollar gets stronger, which reduces the price of imported goods (importantly, fuel / oil, which effects the price of everything else), and reduces international demand for their products, which in turn eases domestic supply (i.e. it's deflationary). The issue for us is that we're caught in the crossfire if our major trading partners are all raising rates and we aren't. If we don't raise rates with them, we import their inflation and things get worse for us; if we do, we reduce the effectiveness of their strategy.
Businesses are going to suffer, we and everyone I know have already changed our spending habits massively. No cinema, no cafes or restaurants, no take away, search the supermarket specials and only buy mince sausages and chicken. Raising interest rates has certainly worked…..
Hopefully by the end of the year our economy can return to normal, I am same with spending habits, now we have Domino's once a fortnight and drinks at home 😁,
Can you stop corporations fleecing the general public?
What date was this programme broadcasted or posted on youtube?
at the end of the day, its corporations making profit at the expense of its customers and suppliers
Inflation is pretty much driven by greed and it often starts with fuel companies. Once the price of fuel goes up, everything else has to follow it and then we get demands for higher wages and the cycle just spins around and around until the government puts the fiscal brakes on and the economy falls into a recession or worse. When you have an economic model that is centered around greed and the desire for more and more money, how can you ever get rid of this cycle?
Simple - end Capitalism...
Ok, not so simple.
So there are times when people are not greedy?
@@kdegraa Some people are driven by greed, some are not; capitalism gives the first group all the power.
You’re really dumb, and very wrong
@DAMA agreed, however government does have the power to shape corporate behaviour within it's own jurisdiction.
I think the retirement crisis will get even worse. A lot of people can’t save because of low paying jobs, inflation, and insane rental rates. And now that home ownership is out of reach for middle class Americans, they won’t have a house to retire with either.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000
Mind if I ask you to recommend this particular coach you using their service?
'Carol Vivian Constable, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
I copied her whole name and pasted it into my browser; her website appeared immediately, and her qualifications are excellent; thank you for sharing.
I graduated uni into a 2008 depression - more "older" workers lost half their retirement funds almost overnight, so they stayed working. How was I to get a job / their job, if they were still in it with 35 years experience? It's been calamity after calamity and boomers cannot do without a grand a week, and the pension doesn't pay that much, so they stay in work. Often right into their 70's, they have millions but just keep a toe in. Get out and live your last years - leave us the younger gens to get a go at working life.
.... ... .. supply and demand is one thing but Debt via government and personal loans causes money printing.. which causes inflation. With interest rates at practically 0 for so long, this was bound to happen, it's just unfortunate that it's happening during shortages, which really is not just the Ukraine issue, the supply issue has been culminating for some the last 10 years and is breaking now.
Ahhhh… The whole world is dealing with the inflation issue… Couldn’t have anything to do with helicopter money that was thrown everywhere for people to pick up, could it? Free money really isn’t free… it costs us all in inflation and future generations pay the price… We’re in for a rough century…
"The reserve bank likes to keep inflation between 2 and 3%"
They don't mention that the reserve bank has utterly failed to achieve this and is so bad at predicting inflation that you are better off guessing.
The reserve bank worked with the last government to con the public into continuously dumping money into the ponzie scheme housing market to keep from showing how useless they were! Lowe knew we were screwed
Not to mention the stability of the currency looking at the last decade AUD/USD chart a 2 year old can draw a straighter line.....
They expanded the money supply by about 25% during the pandemic to prevent economic collapse. So more money in circulation WITHOUT a rise in productivity. Hence, money just became more worthless. Property prices didnt rise....money became more worthless hence you need more money to buy property.
they're like BOM, the meteorology team and rba have the same capabilities,,
The solution is to increase mortgage interest repayments?
Definitely not (unless they're trying to create real estate fire sales, so the mega wealthy can gobble up more for bargain basement prices.)
Definitely time to end tax write offs for property investors.
For those that claim this would hurt hard-working folks ability to prepare for retirement, perhaps limit investment properties to a single dwelling for tax purposes.
The little bit extra some workers got during the lockdowns is nothing compared to the lack of pay raises we've never gotten for years!
This is sooo well explained
Why are property prices not part of inflation in Australia?
So many economic issues would be alleviated if we became energy independent through renewables.
Inflation is just a symptom of the real disease which is growth. In an economy growing at 3.5% p.a. consumption doubles every 20 years. So in 40 years it quadruples, there's 8 times as much consumption in 60 years and so on. That means by 2062 we'll be chucking 4 times as much plastic in the oceans, have 4 times as much freight on the roads etc. It can't go on like this. It's okay to have growth in certain sectors for certain periods of time, for example we should grow the number of affordable housing units until everyone has a decent roof over their heads. However, growth itself should not be the aim. Rather, we should work out what we need and want from our economy and then work out how to distribute the benefits and responsibilities that entails.
Every business owner wants growth. You going to tell them not to grow their business?
Also, we will never work out what we want from an economy because, when it comes to economics, there is no "we".
@@davidg1838 The Earth is finite - we'll all find that out sooner or later - business owner or not. What do we want from an economy ? is a hard question to answer, not just for the reason you raised ,but it's a better question than 'how do we perpetually increase GDP ?'
Legendary yes
@@jeffreygillham9890 The Earth is not a business. In a healthy economy, there is always opportunity to grow a business without necessarily consuming more resources. Many work on increasing margin, not volume. Service-based industries rely more on human resources and can grow exponentially without a significant demand for natural resources.
Without growth, there is no incentive to launch a new enterprise or expand an existing enterprise, which are important events in a healthy economy.
Because the fractional reserve banking system is fundamentally flawed, and requires constant growth. True inflation is caused by a rise in the money supply, without a corresponding rise in productivity. IE. Money Printing through the debt machine - spawning money into existance when people take mortgages.
It's not demand-pull so much as it is money printing (QE) that is causing the ongoing inflation. I think we will see higher than usual inflation into the foreseeable future because we did an extraordinarily large amount of QE
Yes, the reserve bank can do a lot of the blunt work. This completely ignored Government Fiscal Policy, remember when the head of the Reserve bank was basically Screaming at Joshy to let go of the dream of a Budget Surplus and help stimulate the Economy?
Demand is not how much something is needed. It is how much it is wanted by people who have money to buy it. Some people may be starving but have no money to buy the food. So there is no demand there. Yet someone could be full of food and just buy way too much and throw out half of it. Lots of demand there. Define your terms more accurately please.
(John Oliver's explanation was better!) The fuel rate rise is being driven by the greed of the oil companies, so the govn. should temporarily lower the fuel tax rate and hit the fossil fuel companies with a corresponding tax to compensate.
But essentially, developed economies, like Australia's, need to focus on wealth distribution, not growth.
1:47
HOUSING is now in the CPI calculation? i'm assuming 'housing' means mortgage and rent increases?
is that a recent addition?
cheers
The 189 billion dollar loans to profitable banks wasn't included as a cause for inflation
Annoyingly we only call it inflation if it effects things in the consumer price index.
If you dump cheap money into assets like stocks, houses & precious metals, then suddenly the market is booming. Do the same for food or fuel then suddenly there is a crisis that requires interest rate hikes.
Supply and demand. If the supply doesn't have enough, the supply or product will increase because the supply is out of stock. But not all is the same some products or supply will increase even if it is demand.
1929 wasn't an accident. 2008 wasn't an accident. ...and neither is 2022.
High prices increase in the country because they want fewer people to buy. Also, price increases because the supply is running out in the country and having a hard time getting the supply to other countries because of their relationship with other countries where they get the supply.
Yeah that's what happens in a textbook of economics 101 but do you see a lack of supply anywhere!?!
No matter what, those people handling investments still get their cut.
When suppky comes back on line, the prices won't reflect it.
What about all the money printing?
I think where this doco fails to address is what essentials are affected and what proportion of population is this inflation affecting (top 20% v bottom 20%). There is popular believe on the internet that this inflation is initially caused by profit-taking by shareholders, rather than genuine shortage of supply, with rising prices driving panic that eventually causing a supply shortage.
Nailed it
Interest rates should have been higher then inflation. Central banks printing money and governments spending money like drunken sailors. Panic in the leadership and more government control on its way. Grow your own food and pay your debt!
Simple economic, like your info
Australians have it just as tough if not tuffer as us Americans. It's worldwide 🌎 stay strong and forgot to whatever you do don't swipe the card for what you need. Easier said than done from experience sometimes it takes falling on your face learn from your mistakes
always pay cash for everything buddy thats why i ain't in trouble !!! lol
Interest rates aren’t the only way to address inflation, there is also fiscal policy (tax) but the government doesn’t want to be the bad guy
Cutting interest rates during lockdown was a big mistake.
Disingenuous at worst, ignorant at best.
The RBA didn't tank interest rates for the poor old aussie battler so that they would spend.
They tanked it so massive companies could buy up smaller companies for pennies on the dollar during the covid crash. This created an artificial stimulus of the ASX which we're now feeling the two fold effects of. Increasing interest rates AND a falling ASX.
We do we keep letting bankers be in charge of national reserve banks? They've been proven inept or outright greedy at every stage.
Mind blown! I'd not considered the possibility that this was complicitous with large business interests in swallowing competitors.
No matter how much I learn about the machinations of the vastly wealthy, there's always more hidden wheels within wheels.
Seems to have conveniently forgotten the real cause, the money printing
Simple: Ensure money supply is consistent. Push pull interest rates so money supply stays CONSTANT. (because money is spawned into existance when people take loans). During 2020-2022, the money supply expanded by 25%, WITHOUT A CORRESPONDING RISE IN PRODUCTIVITY. hence money just became 25% more worthless. If you could shrink the money supply to 2019 levels, then prices will drop because money becomes more scarce.
^how to cause a significant recession
@@benharris4218 ^believes MMT is anything other than a scam
There is something really wrong with the way Anglo-Saxons take care of their people. There are so many homeless people in a country so rich in mineral resources able to dig anywhere in occupied land. Look at Saudi or Brunei how they help each other. And in Australia people just cheat each other all the time. Coffee $5? Wow.
People has to stop eating at restaurants and buying at coffee shops for a while, then prices will freeze because companies will get the hint.
Government the crooks my client losses 66% profit to government a cafe owner , since coffee imported from Europe it tax 73%
paul volcker did the right thing, back in the day. if the rba wants to help australians they need to jack up interest rates and crash the bubble economy they have helped create, short term pain but necessary to put us back on the right track too an economy that runs on sound money and that isnt mal-invested too the extreme degree it is now.
Total money spending in a year now and what was expected in hostel and how much is affordable without losing valuable things see.... after that, see how much you can spend on vegetables and goods in 1 month and 1 week and 1 year see... and then start buying things based on that plan
Yes we can stop it.We can start paying in coins instead of notes
I feel there's some fundamental points that have been missed in this clip:
1. Market monopolies: in a number of key markets, there are few enough players that they can set unreasonable prices without fear of losing custom. Record profits are being seen across a number of consumer necessaties, and in a competitive marketplace, the companies providing them would not risk losing custom due to price increases.
Governments have the capacity to introduce effective anti- competion legislation.
2. Ukraine war: this is often cited as being the reason behind price increases for both gas and fuel.
However, Australian gas and fuel production has not been interrupted by the Ukraine war.
It has caused direct supply issues in Europe, but not elsewhere.
The government could conceivably take action against local price gouging, either via a windfall tax, or domestic price capping ( they've recently capped a little for gas, but not to any degree that will genuinely help those who cannot afford the sharp increases in energy that we'd already experienced over the last 5+ years).
These companies in the energy sector already pay little to no tax, they enjoy massive government subsidies and infrastructure support (all taxpayer funded), and they extract non-renewable public owned assets. There is no reason, aside from greed, that they genuinely need to raise prices in this country. Fuel price gouging is responsible for increased consumer costs across all industries, and it could be prevented via legislation.
The current inflationary pressures we are seeing are not necessarily demand driven, they are being driven by greed based price hikes from companies who are already raking in unprecedented profits and who are able to do this due to a lack of genuine competion.
Interest rate hikes will do nothing to change the pricing policies of established monopolies. What increased interest rates WILL do is reduce consumer spending. This won't affect large corporations who have already been making unprecedented profits, as those companies have enough fat to weather lean economic times. Those companies have a captive customer base due to a lack of competion, so they don't fear any meaningful loss of income from interest rate hikes.
The interest rate hikes will only shrink competition further as decreased consumer spending hits small businesses hardest, and they fold first.
The good news is, contrary to what this clip suggests, interest rate hikes are NOT the only tool we have to combat the rising costs of goods and services.
There are a number of legislative changes that our government could make, such as the following:
- sensible resource taxing, so that energy companies actually have to pay for extracting our finite national resources;
- charging those companies appropriately for the use of public owned infrastructure (train lines, ports etc), so as to recoup the cost of public spending in building and running that infrastructure;
- effective anti- monopoly laws that both disallow the concentration of industry sectors, and effectively break up monopoly players;
- effective anti- competition legislation, to allow new business space to grow in the market place (this also has the effect of improving working conditions for staff, as they also have increased employment options);
- closing tax loopholes. The ones that allow profits to be shipped overseas untaxed, the ones that allow obscene amounts of wealth to be transferred via inheritance, the ones that allow the mega wealthy to hide their wealth via trusts etc, the ones that not only allow but encourage the insanely well-off to buy up property as a tax dodge (which would also provide downward pressure on real estate prices), abolish grandfathering laws that allow some lucky multimillionaires to avoid public financial scrutiny, the ones that allow the mega wealthy to effectively pay less tax than those earning average or below average wages, the list just goes on, greatly increasing the tax rates on earnings and bonuses/ sick options/etc above a certain amount (I mean, who actually desperately needs multi million dollar annual incomes to have a reasonable standard of living? Earnings of this magnitude are often not the result of an individual's productivity, but from the excess extraction of wages and conditions of actual workers).
There are so many more levers that government has at its disposal to keep large, greedy and monopolistic companies from destroying our economy and quality of life.
Let's demand more of the public institutions that are charged with the responsibility of ensuring fair and equitable living conditions for all citizens.
Edit: I meant stock options, not 'sick options'!
@@bowerbird1196 Most of what you've suggested will make matters worse. They all increase the size of government, and restrictions upon the market. Government interference reduces competition in a market, which drives monopolization.
You've also Completely neglected that government is the prime driver of inflation. Only it can print money after all. If you print money, that money will be spent to buy goods, increasing demand for those goods. Supply and demand laws tell us that this increase in demand will cause the goods to rise in price. It's very simple, printing money causes inflation.
The government and beneficiaries of it's money printing, want to confuse the public on the cause of inflation. They misdirect everyone by claiming it's a total mystery or that it's people and businesses demanding higher wages and prices. This is a lie told by the thieves and con-men that are the government.
Money supply has to be slowly decreased other wise it would cause a hard hitting deflation
Everything at aldi that's been the same price since forever has gine double . 5 bucks for box of fish fingers . Now 10 . Spur cream 2. Now 3.20 and it goes on and on . Or how about the fact they say petrol stations don't dictate the price .yet ....2 days before Easter 1.60 . Friday of long weekend . 200. Then the day after Easter. 160 .
Loose monetary policy - money printing and record low interest rates
No mention of the RBA printing money out of thin air?
I thought we got most of our fuel from Asia
Doesn't address price gouging by our Coles / Woolworths duopoly ! Incomplete discussion !
"Inflation is not a scary word... In a normal world, inflation means we're spending more, our economy is growing and growth is good" Mises is rolling in his grave.
Inflation means the monetary supply is in increasing faster than productivity is rising.
When Australia, assets of $10T, prints $1T, expect inflation at ~9%. It's not rocket science!
What is going on ?the entire world is going through the same crisis.Oh lord put a hand.
You changed the definition of inflation. Inflation is the expansion of the money supply. Rising prices is only one of the symptoms of inflation. What everyone should be asking is who is expanding the money supply? There’s only one answer to that!
I don't think this is looking deep enough into the reason. If it was all about supply and demand of goods, then prices would go up and down around a mean - but inflation is consistently positive. Inflation has to be because the supply of money itself is consistently increasing(?).
Not one mention of the Morrison Government printing excessive amounts of money
We gave out tons of cheap/free money, goods/assets all got bought up, now the cheap/free money is gone, their are no goods left, just debt. The solution isn't more money, it's less money and more production. You can't print more oil/gas/fertilizer/food. Can't have your cake and eat it too.
Apart from interest rates etc another reason which hasn't been addressed are corporate ceos on big bucks & shareholders who also want their slice of the pie !!& cashless society let's get out the card? Lol never had this problem years ago ! You either paid cash or go without ! Simple as that !!!
Velocity of money causes inflation
Good luck for Homeowners, remember what WEF said, you will own nothing & you will be happy, don't think for one second you will keep your house.
Why should supermarket prices suddenly and dramatically increase if the costs of production , for example ,worker's wages and raw materials , have not increased ? The fact that more goods are being sold should have sweet FA to do with anything unless blatant profiteering is the order of the day...and then, only, if supply is an issue. The Australian housing situation is different. Prices have increased so much and so quickly due to a combination of several , definite and easily identifiable factors. One is our deliberate, idiotic policy of rapid, excessive and utterly irresponsible population growth. Another has been the RBA's decision to keep interest rates a near - zero for so long . Why have they done that ? Because they could see, as far back as five years ago, that the economy was going down. Interest rates had been dropping for a long time. By the end of 2019 , they were already at around one or two percent .....and the retail sector was stuffed. Both the federal government and Lowenstein and Co were hoping that the pandemic would "correct" the housing market without them having to increase rates. Of course, the exact opposite happened.
What I don't understand in this whole issue with inflation in Australia is the fact that they know it is supply driven, not demand driven.
All the arguments so far is how we reduce demand, hence the interest rate rises.
Why is the conversation not flipped and we ask, how can we increase supply?
Interest rates rises does not fix the supply side so not sure how its going to fix inflation except send over leveraged borrowers into poverty.
Because it is infinitely easier for the government to control local demand than global supply. They could try to increase local supply but that would likely take a long time and it is extremely difficult to increase supplies like petrol which rely on geographic location of the country.
Also over leveraged borrowers should not exist in the first place if the banks are regulated properly and social welfare is provided to counteract the increase in poverty.
Your forgetting about the money printing
Increasing supply is a long term endeavour that takes longer to manifest, increasing interest rate is a medium term endeavour that sees quicker effect in the medium term. However, interest rate is a very blunt tool that affects all sectors of the economy incuding those that are already in recession, causing it to further slump. Another aspect we should be talking about are strategic reserves of essentials and trading of commodities futures. Price expectations of both bank on the confidence of future supply and expectation of supply fulfilment. In extraordinary circumstances, futures trading should be suspended and government should take over commodities trading and essentials to guarantee supply domestically. The free market will fail to work once force majeure is in place, because the normal assumptions for a working free market has failed.
@@fisherfriendman Its already happened in the construction sector, up to $88k in home builder grants means the massive increase in demand has sent materials and labor costs higher. Interest rates are a blunt tool but what about tax policy, higher taxes can slow the economy the same way and can be targeted more accurately. But the politicians don't want to be the bad guy and prefer to blame the RBA.
Between 2020 and 2022 the AUD increased in supply by 25%. Hence, it effectively became 25% more worthless, and when the newly spawned money circulates, the prices of everything will rise. This is true inflation - it has nothing to do with supply/demand shocks such as war. This is what we are seeing. Australia has a trade surplus with even China....so there is no reason why this should be the case.
Excess supply of money has devalued the currency causing inflation of goods
Inflation is a monetary phenomenon
What a bunch of lies!!! You say I quote “inflation means it’s spending increase that means economy is growing”. Shameless completely this front lie! Tell this to Sri Lanka, Brazil and other countries seeing inflation over 100%
The interest rates have been low for years in Japan and everyone doesn’t spend so much. Also wage growth is virtually no existent. Minimum wage 9.80 an hour. Japan has little to no inflation. Well not enough to be headline news everyday like the west.
waste of time, no research or talk about stimulus. I liked the graphics and music of the video, nice editing mate.
Inflation is growth of the money supply
NO .
Money is debt... loss of purchasing power
Don't spend more than what we can afford.
Ps5 is a good example of things being too expensive
grow your own food, if you can. I am, tastes better, fresher, more nutrients, garden to table on the same day.
anglo-saxon reaction is always the same: lets blame other people
Printed a heap of money. It’s not complex. We are told it’s complex to prevent us rioting on being ripped off. Reading the comments here, really does appear people are calling bullsh!t on the nonsense. They understand. Blaming floods and pandemics is ridiculous. Disasters happen all the time. That’s not a reason
I would be interested in finding out how much the war in Ukraine has on inflation
Did growing really is “good” ? If that is true then everyone will be happy now
inflation is caused by price gouging and corporate greed
This!!!
It's funny how clueless mainstream media is about how the Economy works. Deflation can actually be very good for the economy, and doesn't necessarily have to lead to recession. The real reason deflation is avoided at all costs by government is because they can't tax deflation. Therefore, their main objective is to keep the money supply inflating forever, to ensure there are always higher GST, capital gains, income taxes to be paid, in addition to this, they can spend the new money supply benefiting from the creation of inflation not just through taxes but also through the money creation itself. These journalists are either clueless or are just spreading the same propaganda spread by government and central banks.
More than gst there custom duty 5% ' 10% import duty " 48% fuel excise " 65% alchoal excise " cigrretes excise 90% " cars tax 18% - 56%
Most people's lives are going to be difficult because wealthy people are in charge. We need homes yet most politicians are deincentivised to do anything because they benefit financially. In fact, anything that creates greater distance between the wealthy and not wealthy benefits them. We have diversity in almost every demographic; gender, age, race, religion, size, etc. EXCEPT wealth. Wealth is not compassion or intelligence. I challenge anyone to find a problem that has not been created by wealthy people. They specialise in exacerbating it for their own benefit!
Greed. I moved to Mexico at 79.
Its cheaper to buy fuel from someone else rather than spending billions to make yourself (your country) self-sustaining. Most of our world fuel comes from Russia for those that didnt know
Bath
Also easier to import immigrants
Import food
Import goods
Import tech and etc etc
But then you're vulnerable and the country becomes less powerful valuable
Says interest rates are the only tool, rubbish what about fiscal policy
Isn’t having interest rates at record lows “printing money” but just as debt instead of direct payments?
I’m curious why printing money in the form of direct payments are inflationary, but low interest rates aren’t?
Printing money works because productivity has increased for the last 10 years without workers seeing any profit, so free money is owed to those who actually work instead of asset owners.
Low interest rate are inflationary, but for assets rather than consumer goods. The Australia housing market wouldn't act the way it does if your home load had a 10% p/a interest rate.
@@adamdymke8004 The Australian housing market wouldn't act the way it does if tax breaks for investors ceased, and foreign ownership was not allowed.
@@bowerbird1196 Investors would'nt waste their time with housing if industry wasnt so regulated and could thus grow. Perhaps if we rounded up the CCP traitors in the government, we could get a good start.
Yeh uh and money printing
“Excess demand” is only a symptom of inflation, it is NOT the cause, inflation (the gradual rise in the average prices of goods and services) can only be caused by one thing, when the government prints money and pours it into the economy faster than the economy can produce goods and services, businesses will increase their prices to cope with the increase in demand, if you want inflation to go down, there are only two ways this can be effectively done,
1-the government needs to stop printing money and pouring it into the economy.
2-raising interest rates.
I am not sure business has anything they need to "cope" with. If there is a need demanded that they can supply, good there is a sale. if there are more people demanding a need to be met, businesses have the "opportunity" to charge those willing to pay a higher price. The supply becomes the issue. I agree with what you are saying, the use of the word cope seemed a bit inappropriate. Speaking of supply, Biden could have allowed the production of more fuel that meets or comes close to meeting whatever Putin threatened to remove but used political manipulation in the form of regulations to reduce the supply of fuel as he dumped money into the system. All or most of this could have been avoided.
This sucks 😔 this world man no I’m sorry the people are just ugghhh 😡😤
It's okay guys, Biden just saved a bunch of money by switching to geico.
Islamic Commerce
- No inflation
- No Poverty
The core problem in modern economy is that money is a product. Money should be a tool.
Lending money for money with interest has to stop, instead Banks buy and sell goods with installments based on benefit value. Banks buy shares from factory or company.
"Allah condemns exploitation, and He blesses charities. Allah does not love any disbelieving sinner."
Quran 2:276
Furthermore rich to spend 2.5% of net saving to the poor yearly
Within time, no poor, no inflation, and money will cycle between rich and poor .
Stop burning money in gambling or extravagance
Finally everyone will meet Allah alone after life and will be asked from where you get your money and where did you spend it.
Please read more about Islamic finance
Thank you, whishing you all the best
Eat the bugs peasants
Only way is to keep putting up rates