Sentinus Enterprises LLC
on April 17, 2025
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BEWARE of posts like this that oversimplifies a complex economic concept and contains obviously a strong bias.
The post defines inflation as "when the money supply increases faster than the production of goods and services." This aligns with the monetarist view of inflation, often associated with economists like Milton Friedman, who famously said, "Inflation is always and everywhere a monetary phenomenon." In this view, excessive growth in the money supply (e.g., through government printing money) can lead to too much money chasing too few goods, driving up prices. This is a valid perspective and reflects a key cause of inflation in many historical cases, such as hyperinflation in Weimar Germany or Zimbabwe.
The statement that "rising prices are a symptom of inflation, not the cause" is also technically correct. Inflation is typically measured by the rate of increase in prices (e.g., via the Consumer Price Index), but the underlying cause is often tied to monetary factors, demand-supply imbalances, or cost-push factors. The post correctly distinguishes between the symptom (price increases) and a potential cause (money supply growth).
Where It Falls Short:
Oversimplification: Inflation isn't solely caused by money supply growth. Other factors can drive inflation, such as:
Demand-pull inflation: When demand for goods and services exceeds supply, prices rise (e.g., post-pandemic spending surges).
Cost-push inflation: Rising production costs (e.g., oil price shocks, wage increases, or supply chain disruptions) can push prices up.
Built-in inflation: Expectations of future inflation can lead to higher wages and prices in a self-perpetuating cycle.
The post ignores these other causes, presenting money supply growth as the sole driver, which isn't accurate in all cases.
"Government Money Printing" as the Culprit: The post claims the "true culprit" is "government money printing," dismissing "corporate greed." While excessive money printing can cause inflation (e.g., through quantitative easing or deficit financing), it's not the only factor. Central banks, not governments directly, typically control money supply in modern economies (e.g., the Federal Reserve in the U.S.). Additionally, "corporate greed" isn't a formal economic term, but price gouging or profit-driven price increases can contribute to inflation in certain contexts, especially during supply shortages. The post's framing is overly simplistic and biased, ignoring the role of market dynamics or external shocks (e.g., global events like the Ukraine war affecting energy prices).
Lack of Nuance on Price Increases: The statement "inflation isn't when prices go up" is misleading. In common usage and economic measurement, inflation is defined as a sustained increase in the general price level of goods and services over time. The post's definition is more about the cause of inflation, not the phenomenon itself, which can confuse readers.
While the statement is partially accurate in highlighting the role of money supply growth as a cause of inflation and correctly noting that rising prices are a symptom. However, it oversimplifies inflation by ignoring other causes (e.g., demand-pull, cost-push factors) and shows bias by pinning the blame entirely on "government money printing" while dismissing other factors like market dynamics or corporate behavior. Inflation is a multifaceted issue, and the post's explanation captures only one piece of the puzzle.
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