matta on Nostr: • INFLATION Inflation occurs when there are too many dollars chasing too few goods ...
• INFLATION
Inflation occurs when there are too many dollars chasing too few goods and services, driving up prices as demand outstrips supply. This can happen when the money supply grows faster than the economy’s ability to produce, leading to a general rise in the cost of living.
Example, if people have more cash but factories can’t make enough cars, car prices climb. Inflation can also be fueled by rising production costs or supply shortages, but the “too many dollars” idea highlights the role of excessive money in pushing prices higher.
• DEBASEMENT
Debasement is the process where adding more dollars to the economy dilutes the purchasing power and strength of the currency. It happens when the money supply expands, through printing money or stimulus—without a matching increase in economic output, weakening each dollar’s value.
Example, if the government doubles the dollars in circulation but goods remain scarce, a $5 meal might cost $10, showing how debasement erodes what money can buy. Historically tied to reducing metal in coins, it now reflects a currency’s diminished real worth in a modern economy.
Inflation occurs when there are too many dollars chasing too few goods and services, driving up prices as demand outstrips supply. This can happen when the money supply grows faster than the economy’s ability to produce, leading to a general rise in the cost of living.
Example, if people have more cash but factories can’t make enough cars, car prices climb. Inflation can also be fueled by rising production costs or supply shortages, but the “too many dollars” idea highlights the role of excessive money in pushing prices higher.
• DEBASEMENT
Debasement is the process where adding more dollars to the economy dilutes the purchasing power and strength of the currency. It happens when the money supply expands, through printing money or stimulus—without a matching increase in economic output, weakening each dollar’s value.
Example, if the government doubles the dollars in circulation but goods remain scarce, a $5 meal might cost $10, showing how debasement erodes what money can buy. Historically tied to reducing metal in coins, it now reflects a currency’s diminished real worth in a modern economy.