Key Points
- As shoppers await price cuts, retailers like Home Depot say their prices have stabilized and some national consumer brands have paused price increases or announced more modest ones.
- Yet some industry watchers predict deflation for food at home later this year.
- Falling prices could bring new challenges for retailers, such as pressure to drive more volume or look for ways to cover fixed costs, such as higher employee wages.
That’s an issue with non-cash assets (like cash was when we moved away from the gold standard). And why Bernie suggested they be taxed heavily.
But the intention of inflation, was to prevent the hoarding caused by the gold standard.
How does reducing the value of cash prevent hoarding of gold (which would be worth more cash then)?
It’s not to prevent hoarding gold, it’s to prevent hoarding money. When tied to the gold standard when gold is worth more, money is worth more, and vice versa. By not selling my gold (or using my money), the gold (and cash) in circulation becomes artificially worth more, as the law of supply and demand dictates. This encourages the hoarding of cash because your money becomes more valuable the less money is in circulation.
The paper standard solves this through yearly inflation and decommodifying money. Commodities are subject to the law of supply and demand. Paper money isn’t and shouldn’t be. When both currency and the things we buy with currency are subject to the law of supply and demand, the system breaks down, essentially.
So, we no longer tie money to commodities. A lesson we learned the hard way, unfortunately.
But then they just hoard real estate.
You’re right, and it’s basically a loophole in the system. It should be fixed.