Why Printing Trillions of Dollars May Not Cause Inflation

in hive-116221 •  4 years ago 

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Asset prices going up substantially relative to earnings or their intrinsic value is where our inflationary effects are seen the most. I think a diversified service economy helps mitigate the overall effect of inflation in an ordinary person's life and is not as noticeable. Covid-19, however, limits the goods and services we can spend money on and that showed with pronounced price increases in food, garden tools, cleaning supplies, and other household essentials. Our inflation has been substantially low, I think, because technological advancement lowers the price of goods and services throughout the economy. Also higher productivity and production of goods and services resulting from open trade also helps keep prices low and helps working Americans the most. Sure, the risk of perpetually falling prices is a documented fact in economic theory, but I think we place too much fear on deflation nowadays, especially since deflation would help Americans relearn saving habits and encourage governments to spend less money (because of resulting high interest rates).



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