Ask Prof Wolff: Inflation's Risks

A patron of Economic Update asks: "If there is a relationship between inflation and the capacity of a country to absorb newly printed money, how do international markets affect inflation since dollars are used around the world and some of the new money would make it to the world in general? Is the dollar less prone to inflation because dollars are used around the world? If so, is there a measure of inflation resistance for different currencies to get an idea where the dollar stands vs other currencies?"

This is Professor Richard Wolff's video response.

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“A magnificent source of hope and insight.” Yanis Varoufakis, Greek economist, academic, philosopher, politician, author of Talking to my daughter about the economy.
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[juliahenriques]

Such a simple and effective explanation. Thanks, professor.

[aaronanderson]

I like the Ice Cream cone example. Lol Richard D. Wolff is so clear with his words it's hard to believe anyone could misunderstand him.

[MisanthropicAndOutOfCoffee]

Dr. Richard Wolff for U.S. Senate New York!

[richardgeddes]

Thank you! I never thought about the stock market rising as inflation. It's always framed as "return on investment" or some other positive cliché.

[adamsorell]

DR Wolff and Chris Hedges my favorite speakers

[jc]

Few examples of prices rising: nitrile gloves cost 15$/100 a year ago. they are now 26-30$. Rubbermaid storage bins used to be 13$, and now rubbermaid sells them for 40$. Turkey has risen 20%, from 10-12$/lb. A loaf of good bread is 6$. Gas went from 2$ a gallon for multiple years to over 3$ per gallon. Wages have stagnated for 50 years and an increased federal minimum wage should have been the top priority of the administration right alongside pandemic relief. We are about to see more steep increases in the price of common consumer goods, and the administration has failed us greatly by not pushing a min wage increase. There will be some drastic consequences of that failure.

[wermcfamily]

Wow. Great 10 minute lecture. I wanted 20 more minutes at least.

[gittefeingeist]

I am in love with the smart Cadovius sheves behind the professor. Smart design of the 50s and 60s

[matthewcondie]

another great video from the professor

[ParcelOfRogue]

Keynsianism does not work in Germany, as they are major export earners and far from a neat closed economy

[dddpvt]

Talk about inflation! Lumber is ridiculously high at the moment.

[richardwong]

Many goods and services in the UK have gone up by 10% or more this year over last year. These are basic goods and services that ordinary citizens use, so it is really a blow to their dwindling household budgets. In some industries that I know suppliers keep sending out letters to their customers about their impending price increases, as they can no longer maintain last year's prices. Ever since the UK has formally left the EU the trade barriers and cost of trading have gone up, resulting in lower sales. Some small UK suppliers have given up trading with their EU customers altogether. Some others have set up subsidiary companies in the EU to bypass the bureaucracy. Leaving the UK was seen to be a good idea by some but the consequence, at least in the short term, is clear, hurting both parties (52% voted for leaving the EU and 48% for staying in the EU during the 2016 referendum). It is reasonable to suggest that when we are united we become stronger, and vice versa.
Returning to the point of inflation, I don't know how the UK National Statistics has calculated its figures. It has consistently reported very low inflation for a long time, but that's not what people experience in real life. Foods are definitely more expensive than before.
Whilst people have different ideological differences we should appreciate it that China has kept inflation worldwide lower than it would have been for many year because of their efficient mass production. Any decoupling with China will hurt people all over the world financially.

[julieannmyers]

Have you done a video explaining the difference between MMT and Keynesianism?

[againstorthodoxy]

"Inflation occurs when sellers raise prices; they can do this profitably when the forces of competition are weakened by the differentiation of products, real and factitious, misleading advertising, obfuscating sales gimmicks and package deals, mergers and takeovers, and the increasing importance of ancillary services, trade secrets, patents, copyrights, economies of scale, overheads, and start-up costs. Inflation can and does occur in the midst of underutilized resources, and it need not occur even if we were to consume our capital by failure to maintain and replace it, consuming more than we produce." - William Vickrey

[peterjol]

The cycle of life:..inflation...need more money..fight for more money ....win more money....inflation....need more money ....fight for more money more money ...inflation....repeat for life ...never getting anywhere but actually thinking we keep on 'winning'.

[mauibill]

I think there may be a 3rd and even a 4th cause of inflation. I've seen prices artificially inflated, for example, in real estate in my local area, and other things like wages inflated to keep up with that. It's a vicious cycle. Also, there could be pressures exerted from other country's currencies that negatively affect inflation and we've seen that numerous times in the global south.

[whatshisname]

Inflation is a boogeyman imo. It is used to create fear of government spending and social programs even when we're in deflationary periods. In the meantime inflation can be countered with low risk investment. Also, why not pass a law for wages to scale with inflation?

[iFreeThink]

I didn't know people liked keying cars.

[saintpatrick]

supply doesn't seem to be driving up the wages, isn't that weird how labor shortage is completely ignored.

[jgalt]

A currency constantly devalued by inflation, encourages debt, since it can be supposedly be paid off with cheaper
currency...printing money guarantees that...printing fiat money makes it happen faster. ( and there is no
point in saving a currency that is guaranteed to lose value. )

This is clearly a function of the "rentier" (feudal) system which has expanded to the F.I.RE sector
which now dominates the US economy...and which is not engaged in "production".

Supply, demand and diminishing returns...add fiat and continued growth...and the system
fails...because it is impossible for any "individual" to exercise any "real control" in preparing
for any unexpected change in circumstance...or to even have any expectation of
any sort of "stability"...in the short term, let alone the long term.