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When new money is injected, there are always first recipients of the newly-injected money who benefit from this injection. The first recipients, with more money at their disposal, can now acquire a greater amount of goods while the prices of these goods are still unchanged. As money starts to move through the economy, the prices of goods begin to rise, unevenly and disproportionately. Consequently, late receivers of the inflated money realize costs from the monetary injections and may even find that most prices have risen so much that they can now afford fewer goods.
Artificial increases in money supply generate a redistribution of wealth from later recipients, or non-recipients of money, to the earlier recipients. Obviously, this shift in wealth alters individuals’ demands for goods and services and, in turn, further alters the relative prices of goods and services. Inflationary increases in money supply set in motion new dynamics that give rise to changes in demands for goods and services and to changes in their relative prices. Hence, increases in money supply cannot be neutral.
You can see that price stability does not exist in general society with your own eyes. For instance, the dollar price of BTC keeps changing due to increased supply of dollars vs. BTC. Another example would be the change in the prices of computers in terms of dollars, there is in increased supply of computers, even as the supply of dollars increases!
After more than a hundred years of inflationary monetary policy, one must wonder if the Fed is actually striving for price stability.
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Price stability? No, they were after something else. They drove us into WWI, created the situation that caused the Great Depression and WWII, they inflated for LBJ and his guns-and-butter policies, they force Nixon to default on gold issuance, f*cked up the rest of the 70s, crashed the inflation in the mid-80s via Volcker’s rule, busted the 1998 monetary crises, crashed the .com economy, flooded the post 911 economy with easy money, leading to the 2008 housing market crash and slopping us through the teens with inflation until they flooded the market again in the early 20s. No, I could not say that price stability was one of their criterion. It seems that being servile to the banksters and their bought-and-paid-for politicians is their forte.
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It's hard to fathom how econ teachers can continue using the "price stability" justification with straight faces.
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They can use it with a straight face because they know no better than Keynesian statist BS. Most of them have never heard of the other schools of economics, let alone be familiar with them.
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For instance, the dollar price of BTC keeps changing due to increased supply of dollars vs. BTC.
This is what most people don't understand!
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Of course, it is an indication that they don’t understand! Although there is another reason for the fiat price of BTC to rise, the demand for.BTC going up. Since the supply of BTC is constant, or nearly constant, any increase in demand would raise the fiat price. I think both actions are in play with the current BTC prices in fiat changing. More people are coming to BTC as new owners. For instance, me.
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