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re: What actually causes inflation to slow down and stop?

Posted on 10/11/24 at 6:27 pm to
Posted by LSUSkip
Central, LA
Member since Jul 2012
24717 posts
Posted on 10/11/24 at 6:27 pm to
The government pulling money out of circulation will slow down inflation.
Posted by Mandtgr47
Member since Aug 2024
7918 posts
Posted on 10/11/24 at 6:39 pm to
Supply and Demand.

When Demand decreases, sales decrease, thus causing retail prices to drop to induce more sales. When Demand increases, supply can't keep up, and prices increase.
Posted by TigerAxeOK
Where I lay my head is home.
Member since Dec 2016
35174 posts
Posted on 10/11/24 at 7:46 pm to
quote:

The so called "inflation reduction act" was nothing more than printing more money on New Green Deal nonsense. Oh, and it was just government spending to buy votes.

Now consider that +/- 82% of new jobs created were government positions that are 100% subsidized by the American Taxpayer, and the decrease in the power of a dollar goes even more down the swirly bowl.
Posted by DamnGood86
Member since Aug 2019
1230 posts
Posted on 10/11/24 at 8:10 pm to
When people run out of money and quit buying stuff, the prices will stop rising and eventually drop.
Posted by GumboPot
Member since Mar 2009
138911 posts
Posted on 10/11/24 at 8:48 pm to
Posted by Lynxrufus2012
Central Kentucky
Member since Mar 2020
18180 posts
Posted on 10/11/24 at 8:56 pm to
Production equaling or exceeding demand. If there is a surplus of commodities then companies have to compete for scarce dollars by lowering prices. Then they cut back on production to try to boost prices or try to build a better product.
Posted by Bard
Definitely NOT an admin
Member since Oct 2008
57703 posts
Posted on 10/12/24 at 9:26 am to
quote:

inflation happens when the money supply expands. Prices can’t go up forever if the money supply isn’t still going up, so then prices just stay where they are. Is this not true?


Sort of. Inflation is a function of too much money in an economy chasing too few goods and services. We all tend to focus on the money supply in that aspect, meaning that the more money in an economy chasing a static number of goods and services, the more inflation we see.

As the old saying goes, it takes two to tango. In this scenario, the other tango-er is the amount of goods and services available. Make no mistake, money supply leads this dance but if money supply remains static while the supply of goods and services saw steady increases or decreases, that would be expressed through deflation/inflation (respectively) as well.

All that said, to get to your core question; if the money supply remains static then inflation can go up if the amount of goods and services decrease.
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