State of irreversible inflation
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Do u beleive its here, yes it is. And its here to stay for a long time. What are we going to do about it? Is anyone doing something about it?
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Population of world at 1965: 3 billion
Population of world as of 2009 : 6.8 billion
Population of world projected at 2050: 9 billion.
Quite frankly, i don't see how inflation isn't going to get worse.
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Originally posted by ☃®:
Do u beleive its here, yes it is. And its here to stay for a long time. What are we going to do about it? Is anyone doing something about it?
yes, i am making more money to curb the inflation. Goh Chok Tong said, spend within your means, if you overspent, no one can help you. -
Originally posted by Stevenson101:
Population of world at 1965: 3 billion
Population of world as of 2009 : 6.8 billion
Population of world projected at 2050: 9 billion.
Quite frankly, i don't see how inflation isn't going to get worse.
I thot by 2050, we are part of china already??
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Originally posted by angel7030:
yes, i am making more money to curb the inflation. Goh Chok Tong said, spend within your means, if you overspent, no one can help you.
Another one more of the flippant and irrerevent post to side-track the thread.The idiocy of the Taiwanese "hum" never fail to show its lack of integrity in persistent attempting to hijack a thread to entertain the dumbness in a "hum"
Originally posted by angel7030:I thot by 2050, we are part of china already??
Since the Taiwanese "hum" is so anxious of being part of China - it should return to Taiwan, and leave Singapore for Singaporeans.
The insufferable stupidity of the "hum" can only show itself in its total lack of integrity in desiring Singapore to be part of China.
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Originally posted by Stevenson101:
Population of world at 1965: 3 billion
Population of world as of 2009 : 6.8 billion
Population of world projected at 2050: 9 billion.
Quite frankly, i don't see how inflation isn't going to get worse.
Inflation not related to population growth, it's related to money supply and business cycle.
If it's related to population growth then every year will be inflationary and no recession (like what some countries are experiencing now).
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Originally posted by deepak.c:
Inflation not related to population growth, it's related to money supply and business cycle.
If it's related to population growth then every year will be inflationary and no recession (like what some countries are experiencing now).
I would beg to differ....since inflation is defined as a rise in general price levels over a period of time.
Scarcity is a major factor in driving prices up.
$$ supply and the workings of the financial market affects prices through the monetary transmission mechanism....but many factors come from the aggregate demand and supply of a country. An increased aggregate demand would definitely exert inflationary pressures unless your aggregate supply can keep up with it. In other words, if our production can keep up, then there won't be a problem.
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Originally posted by SBS2601D:
I would beg to differ....since inflation is defined as a rise in general price levels over a period of time.
Scarcity is a major factor in driving prices up.
$$ supply and the workings of the financial market affects prices through the monetary transmission mechanism....but many factors come from the aggregate demand and supply of a country. An increased aggregate demand would definitely exert inflationary pressures unless your aggregate supply can keep up with it. In other words, if our production can keep up, then there won't be a problem.
Scarcity is a major factor, but your increase in population also supported by increases in production. It's not like the extra increases in population are free loaders.
If population is a major factor, all those population increases should translate to inflation for all the years. How come recession exist?
It's because of the business cycle, rational expectations and money supply.
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Originally posted by deepak.c:
Scarcity is a major factor, but your increase in population also supported by increases in production. It's not like the extra increases in population are free loaders.
If population is a major factor, all those population increases should translate to inflation for all the years. How come recession exist?
It's because of the business cycle, rational expectations and money supply.
Your increases in production tend to be limited unless you invest proportionately because of diminishing returns to scale.
Recession existed because of the bubbles in the economy. The prices grossly over-valued the goods and services and when the day of reckoning comes, boomz~!
Bubbles are not the same as the business cycle...
Anyway, food is getting more expensive, that's for sure. Because of lack of investments. Fundumentally it would be because of the increasing pressure on the planet.
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Originally posted by deepak.c:
Scarcity is a major factor, but your increase in population also supported by increases in production. It's not like the extra increases in population are free loaders.
If population is a major factor, all those population increases should translate to inflation for all the years. How come recession exist?
It's because of the business cycle, rational expectations and money supply.
Yet increased production must be supported by increased supply of raw materials in order to sustain itself. An increased population don't mean you can squeeze more rice out of an acre of farmland, or increase rainfall.Nor would it neccessarily give you more oil production or additional mineral mining.
I think we have grown too accustomed to the idea of raw resources being unlimited for the later part of the last century and for this century. Or that production increase would naturally follow population increase.
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Ok. I am wrong, you are right.
All inflations are cause by population growth and all recessions are caused by bubbles.
It has nothing to do with money supply like what all textbook claims, it's all a lie.
Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.[6][citation needed] Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.[7][8]
http://en.wikipedia.org/wiki/Inflation
Maybe some kind soul can correct the wikipedia entry.
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Also can correct this entry in wikipedia, it's wrong too.
In economics, a recession is a general slowdown in economic activity over a long period of time, or a business cycle contraction.[1][2]
http://en.wikipedia.org/wiki/Recession
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I already mentioned the transmission mechanism that links the central bank, financial market to the aggregate demand...
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Originally posted by SBS2601D:
I already mentioned the transmission mechanism that links the central bank, financial market to the aggregate demand...
Yes.
I didn't say you are wrong, you are correct 100%.
I am wrong.
Also rises in inflation could be due to inflation targetting by governments, most governments set a rate of inflation for the economy. But I guess they are wrong too, because population growth is the ultimate cause.
http://en.wikipedia.org/wiki/Inflation_targeting
Why inflation is a monetary phenomenon?
Simple, if you don't have money, there won't be inflation.
After Henry Hazlitt,[6] they made famous the assertion of monetarism that 'inflation is always and everywhere a monetary phenomenon'.
http://en.wikipedia.org/wiki/Monetarism
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Originally posted by SBS2601D:
Your increases in production tend to be limited unless you invest proportionately because of diminishing returns to scale.
Recession existed because of the bubbles in the economy. The prices grossly over-valued the goods and services and when the day of reckoning comes, boomz~!
Bubbles are not the same as the business cycle...
Anyway, food is getting more expensive, that's for sure. Because of lack of investments. Fundumentally it would be because of the increasing pressure on the planet.
Oil is the crucial factor. Because it represents the red blood cells that keep the world economy functioning with the constant movement of goods.
Indonesia is already a net oil importer and Malaysia would soon become an net oil importer as well.
Of the largest 21 giant oil fields, 9 are in decline production yet oil demand continues to rise.
Major oil field finds are going to be located in more and more hard to reach places, accompanied by increased cost of production and subsequent price increases in commodities.
With population increase, it would weaken the economy's ability to absorb Black Swan Events (hurricanes, earthquakes, major wars, civil wars..etc). Meaning it would be harder and more difficult for prices to recover, prolonging recession.
I don't deny that there are a lot more factors that i don't know at play. but considering that how much the whole global economy is dependant on fossil fuels and how much consumption is only going to increase with the growing population i find it hard to ignore that it would be a major source for inflation.
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Originally posted by Stevenson101:
Oil is the crucial factor. Because it represents the red blood cells that keep the world economy functioning with the constant movement of goods.
Indonesia is already a net oil importer and Malaysia would soon become an net oil importer as well.
Of the largest 21 giant oil fields, 9 are in decline production yet oil demand continues to rise.
Major oil field finds are going to be located in more and more hard to reach places, accompanied by increased cost of production and subsequent price increases in commodities.
With population increase, it would weaken the economy's ability to absorb Black Swan Events (hurricanes, earthquakes, major wars, civil wars..etc). Meaning it would be harder and more difficult for prices to recover, prolonging recession.
I don't deny that there are a lot more factors that i don't know at play. but considering that how much the whole global economy is dependant on fossil fuels and how much consumption is only going to increase with the growing population i find it hard to ignore that it would be a major source for inflation.
The Gulf War of 1991 and the Oil Crisis of 1973 are examples enough, it shook many countries because their balance of payments went into crisis...it gave a lot of people hardship with inflation, and in places like South Asia, it precipitated many changes.
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No... both of you are wrong. Inflation is when you take a deflated balloon, blow it up until it big and round. The process in which it has undergone is called "inflation."
Simple English also dunno...
TS state in topic, "State of irreversible inflation." He didn't say it had to do with money what.
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Originally posted by Shotgun:
No... both of you are wrong. Inflation is when you take a deflated balloon, blow it up until it big and round. The process in which it has undergone is called "inflation."
Simple English also dunno...
TS state in topic, "State of irreversible inflation." He didn't say it had to do with money what.
Ah, such wisdom! I bow down to your superior intellect!
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When you talk about oil, are you talking about specific inflation or general inflation. because I thought inflation like SBS2601D defined it was, "since inflation is defined as a rise in general price levels over a period of time".
At the end of the day, the increases in oil will be balanced out by decreases in other products and services.
General Equilibrium Model (unless you want to bring relexivity into the equation)
Say your oil increased dramatically, most of your money is spent on paying for electricity and less on clothing. At the end of the month, the retailer will realised that he has lots of stocks left because of subdued demands, he will mark down his goods to clear his stocks rather than lose it.
So when you talk about supply shocks aren't you contradicting your earlier statement that population growth is the sole causation of inflation.
Why I said population growth is not the sole causative force, it's because population growth has been constant throughout, if it were to manifest itself in the inflation graph, you will have received constant inflation throughout and no recessions.
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Also diminishing returns is not static phenomenon, improvements in science and technology can negate diminishing returns (like GMO produce and vertical farming).
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Originally posted by deepak.c:
Inflation not related to population growth, it's related to money supply and business cycle.
If it's related to population growth then every year will be inflationary and no recession (like what some countries are experiencing now).
Inflation is defined as the inordinate, sustained and general increase in price level ie the cost of the basket of goods and services consumed by a typical household in a country increases over a period of time, usually monthly, quarterly or yearly as compared to the current period period to the base period.
Any factors that can cause the prices of those goods and services in the basket to increase will lead to inflation. The factors have been classified and given the heading as the different causes of inflation. There are as many as more than 10 main causes of inflation ie cost-push inflation, demand pull inflation, monetarist inflation, asset inflation, imported inflation, structural rigidities inflation, profiteering inflation and so on.
It is to be noted that only the overall increase in the whole basket of goods and services will lead to inflation.
Note :
1. In economics, there is no specific inflation or general inflation. Specific inflation is incorrectly associated with the increase in price of one good or service over a period of time. General inflation is also incorrectly associated with the increase in prices of many goods and services over a period of time.
There is just inflation ie the inordinate, sustained and general increase in the price level.
2. It is to be noted that the definition of inflation as too much money chasing too few goods is ONLY partially correct as the excessive increase in money supply is ONLY one of the many causes of inflation.
3. Since the inflation rate is based on the cost of the basket of goods and services, inflation can be artificially lowered if the greater increase prices goods and services are replaced by the smaller increase prices goods and services or even by decrease in prices goods and services.
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Originally posted by Lee012lee:
Inflation is defined as the inordinate, sustained and general increase in price level ie the cost of the basket of goods and services consumed by a typical household in a country increases over a period of time, usually monthly, quarterly or yearly as compared to the current period period to the base period.
Any factors that can cause the prices of those goods and services in the basket to increase will lead to inflation. The factors have been classified and given the heading as the different causes of inflation. There are as many as more than 10 main causes of inflation ie cost-push inflation, demand pull inflation, monetarist inflation, asset inflation, imported inflation, structural rigidities inflation, profiteering inflation and so on.
It is to be noted that only the overall increase in the whole basket of goods and services will lead to inflation.
Note :
1. In economics, there is no specific inflation or general inflation. Specific inflation is incorrectly associated with the increase in price of one good or service over a period of time. General inflation is also incorrectly associated with the increase in prices of many goods and services over a period of time.
There is just inflation ie the inordinate, sustained and general increase in the price level.
2. It is to be noted that the definition of inflation as too much money chasing too few goods is ONLY partially correct as the excessive increase in money supply is ONLY one of the many causes of inflation.
3. Since the inflation rate is based on the cost of the basket of goods and services, inflation can be artificially lowered if the greater increase prices goods and services are replaced by the smaller increase prices goods and services or even by decrease in prices goods and services.
Thanks for the correction.
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Originally posted by deepak.c:
When you talk about oil, are you talking about specific inflation or general inflation. because I thought inflation like SBS2601D defined it was, "since inflation is defined as a rise in general price levels over a period of time".
At the end of the day, the increases in oil will be balanced out by decreases in other products and services.
General Equilibrium Model (unless you want to bring relexivity into the equation)
Say your oil increased dramatically, most of your money is spent on paying for electricity and less on clothing. At the end of the month, the retailer will realised that he has lots of stocks left because of subdued demands, he will mark down his goods to clear his stocks rather than lose it.
So when you talk about supply shocks aren't you contradicting your earlier statement that population growth is the sole causation of inflation.
Why I said population growth is not the sole causative force, it's because population growth has been constant throughout, if it were to manifest itself in the inflation graph, you will have received constant inflation throughout and no recessions.
Talking about general inflation.
I don't think i have ever said it would be the sole cause of inflation. But i believe that it IS a major factor that would become more prevalent when natural disasters or wars disrupts supply from a particular region of the world, where there just isn't any spare capacity anywhere to make up for the disrupted shortfalls. Or that a oil producing country would be forced to divert more of its oil production to domestic consumptions.
Yes, as we have seen from the recent Financial Crisis that oil prices plummeled to 30 US. I did not ignore that fact, but my worry is because energy prices are the foundation of the global economy and that production is starting to peak we are going to see an increasing number of financial crashes and subsequent weaker rebounds
Even if population growth remains constant, it must be accompanied by an equally constant production of fossil fuels/food/water/minerals in order to sustain itself. What i'm saying is any disruption to that production would grow more and more devastating as the population increases, resulting in spikes of inflation.
You believe that the effects would balance itself out, i just don't think it's going to be that simple.
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Originally posted by deepak.c:
Also diminishing returns is not static phenomenon, improvements in science and technology can negate diminishing returns (like GMO produce and vertical farming).
GMO does have its potentials i would admit that.
But GMO crops require that the farmer buy the "designer" chemical pesticides, fertilizers, fuels for required leases on equipment, and must BUY SEEDS every new season, or they are in violation of contracts...often leading to foreclosure.
And if the bees (stupid insects that they are) decides to cross pollinate the GMO crops with the neighbouring non GMO crops, the GMO corporations have the right to sue that farm to oblivion. Effectively removing competitioners.
So basically we give the corporations producing GMO food the equivalent power of a government ministry but with none of the accompanied checks and balances. And what happens when they become a monopoly?
It's the same as saying technology gives Singapore the ability to be self sufficient in water but we forget that we actually need more fossil fuels in order to run the deslination plants and NeWater facilities.
The solutions often create more problems than it was designed to solve.