Money Stabilization | What's in the Basket?

#economics #money #inflation

It’s very common to hear price level, basket of goods, and other terms that don’t work well for the value of money. Many will say money is like a ruler, but this is a bad analogy. This implies the ruler can be used for multiple people. The value of money is based on acting individuals. One individual’s “ruler” can’t be used by another. The analogies and metaphors can’t be used for the value of money. The value is always subjective.

Additional money doesn’t make people richer. More money is printed in the name of stimulus. More money is chasing the same amount of goods. Goods don’t magically appear. What is called “stimulus” is actually a sedative. The measurement doesn’t change for everyone equally. The early receivers can buy goods at the old prices. The prices will rise by the time the newly printed money makes its way to you.

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