Why the money supply must inflate

- Isn't it 4 weeks that they have to wait?
Yes, exactly. But staggered 5 per week.
Imagine if everyone got paid at noon GMT, on thursdays glovally. The markets would exhibit weekly behavioural patterns/ trends because the velocity of the earnings part is not continuous.
In a larger example, the other parts of the economy would stagger/supplement a flow of earnings even if its inconsistant. savings people have will buffer individual purchacing potential, and: the business "cash on hand", as well as "stock in storage" would balance the pay cycle and product availability for purchace, etc.
But that value is "locked-up".. im my concept of wealth, these are the units of measure, though their value diminishes as the quantities increase, and are kind of graded onna scale from: decomposing consumables > precious metals.

But we see this exact "effect" when considering "for example" .5% homeloans expiring en-mass from covid, and reverting to 5%. And interest rate uphevials to accomodate money flow changes in the economy as the central rate decisions are even discussed before a decision is made.
 
Money has to inflate because the economy and population grow, more goods and services, more transactions, and we all need confidence that currency keeps flowing. Without that, deflation would freeze activity.
 
betterinvestmentthanshare said:
How is it working out in the west?
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Shithouse because our governments are not spending enough.

Our own Federal government is obsessed with saving money. Our living standards are declining and our infrastructure is crumbling as a result.

Many don't understand that every dollar the government doesn't spend or removes from supply via taxation is a dollar that comes out of the pockets of the real economy. In other words, we're paying for our own demise with our savings.
 
We havent seen the time yet where they blame savers and stackers for the failure but its coming.
It will be all our fault that they spend too much.
Thats why its better to save in gold and silver because its just an old relic and not tied to our money in any way.
 
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mmm....shiney! said:
Shithouse because our governments are not spending enough.

Our own Federal government is obsessed with saving money. Our living standards are declining and our infrastructure is crumbling as a result.

Many don't understand that every dollar the government doesn't spend or removes from supply via taxation is a dollar that comes out of the pockets of the real economy. In other words, we're paying for our own demise with our savings.
Click to expand...

Or trying to stop the AUD from becoming a heavier lead weight.
The other factor is government is spending just not going where it needed. Government growth is out of control, more bureaucrats, more departments, etc etc…….it’s all unproductive
 
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So:

In smaller business that operate entirely within the existing money supply pool domain:
They have to make a profit from good and services, in order to pay for inputs, wages and interest on debts.
And then pay tax, which removes money from the circulating pool, like a negative terminal...

While large companies/institutions/corporates become buffers for employment, investment and structural bulk wants/needs fullfillment.
getting perks like: not paying taxes because of various structural loopholes, or...
being listed for public traded investment, by superannuation funds, or...
being subject to influence by or influence to government and its officials. Like a path of least resistance...

But the governments initiatives need to:
Spend money into existance for projects creating jobs, wages and resources, so that - services and goods can exist in balance in the economy for those wages paid to consume, and for the taxes to be able to be paid. Like a positive terminal...

Except they dont have any cap on funds as they create the money upon its expendeture.
so... ooh I get it now...

Interest rate management so that banks can coordinate with people to generate "personal debt". Like an energy well...
- which drives the endebtured to work in the economy, resulting in paying the tax back.

Balancing the jobs market, in sectors where the enducation system ensures skills, culture and/or lack of them for suitable working classes.
- so that each of the terminals and paths in the system are properly occupied and separated. like an insulator...

and forced investment in the large institutions in the economy that they rely on but dont officially control. (Super / 401k). Like a capacitor...
- so that theirs an ongoing reliance on committed funds "returns delay" such that people will defend the system, even if they themselves "dont hold" a positive account balance.

It all makes sense now.
 
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