Why they cannot defeat inflation in times like these is because they have violated the original premise of what money is. Let me explain, the reason why they cannot defeat inflation in times like these, is because of the all of the money printing as well as the supply issues. In this article lets take a look at the problem of why so much inflation in these times.
You cannot stop inflation at a time when supplies are dwindling.
If you understand (The Law of Supply and Demand) then you will get that as supply chains freeze up, supplies coming in are reduced.
Currency is the Problem
The actual problem will be that you have the same or more currency that has been created during our so called pandemic, and this currency will be chasing after a limited supply of goods.
What Actually Happens in Times of Inflation?
When this happens people will find that the sellers of their in short supply items, they will require a premium price to part with any of those items.
Especially when they don’t know when new supplies will be available. when this happens it will be very difficult to squash inflation during such a period. Now you should be able to see a little of what is coming! And how this will play itself out. When every you have a lot of dollars chasing after a limited amount of goods inflation will result.
Stay Calm
Something big will come along to fix this, so its important to stay calm as we all will need to ride this out! We should realize that this same thing with paper money has happened many times throughout history. Money generally goes form trading things of value to trading representations of value.
This is as old as modern man. Humans learned long ago to trade with others to get things that we wanted. That is what we call barter, that worked for a while until we learned that it was very in efficient. So we decided to use other things to trade as representations of value namely what we call money.
Money What is It?
Money can be anything that we as humans can agree on. Over time we learned to assign weights and size to things that we would exchange for things of value. Leather, wood, sea shells, even Tea has been used as money in the past.
As time progressed men realized that money needed to be something not so easy to create so that it would retain its value. As it turns out metals like gold fit the bill, since they were not so easy to come by and tough enough to withstand daily use.
This is just enough to get you interested, enough to get you to do some studying as to what makes good money and why those were chosen over Millenia.
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