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@taskmaster4450le
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That pretty much means if no ones taking out loans inflation is going to be very low. While times of barrowing lots will increase inflation is that right?

It is more nuanced than that. For example, in times of high borrowing, if there is a lot of economic growth, then yes it can result in some upwards pricing pressures. Of course, be careful about the part of technology in there, especially when it comes to keeping wages under control.

However, if the borrowing is done in a period of economic stagnation, resulting from most of it coming from government, then we see the opposite effect. Part of the problem is the Fed starts its easing process which actually works in reverse and locks money into the banking system, like we have now. The more that is locked in there, the slower the velocity of money which is catastrophic to the push for inflation. Another reason they the Fed finds themselves backed into their own self-imposed corner.

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