Governments stopping to print or lend money they don't have.
The monetary fiat model is broken. Inflation is basically a tax the government can levy and increase as they wish, without democratic due process.
Worse part of it? The poorer you are, the more heavily taxed you get through inflation.
You mean governments stop printing and borrowing money indiscriminately does not stop inflation?
> Supply shocks also create inflation
I did not say indiscriminate money printing by governments is the only source of inflation.
Most money is created by private banks, and velosity of money affect inflation more than money supply does
Non-working poor like pensioners do often get hit hard by inflation.
I swear the things you read about macroeconomics is all just contradicting each other.
The p/e ratio is a measure of earnings per dollar of capital. If you invert it to the e/p ratio you can directly compare to interest rates. So a 5% interest rate is comparable to a p/e ratio of 20. So when the interest rates goes up, the "natural" p/e ratio for stocks goes down, thus deflating the stock market.
I think the OP was talking about real assets like houses, land, cars, etc. Those don't go down in value
most ppl in usa have their net worth tied to homes which have outpaced inflation.
Working poor will never ever be able to afford these again dooming them to permanent poverty for generations. So yea they are aren't really benefiting from inflation even if their salaries kept pace with inflation( which hasn't been the case).
Salaries take months, if not a full year to follow inflation. A salary is always behind the curve and devalued.
Besides, employees frequently fail to secure inflation adjustment to their salaries, especially in blue collar trades, where an individual worker is easier to replace.
Even when salaries are adjusted, it follows an average rate determined (more appropriate to say manipulated) by the same government which created the inflation.
Most likely the rate of inflation for your family's consumption basket is significantly higher than this "official" index.
Only if you're one of the "good poors" that does smart things like living within your means and not taking on debt.
If salaries tracked inflation in an environment without money printing, I'd expect you wouldn't observe an increase in inflation.