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How do you distinguish greed from inflation ?


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I just wonder how one can accurately distinguish the two.

At what point does inflation turn to unnecessary greed. If a Ford fiesta is made from many individual priced components and a few are just greedy suppliers ultimately the whole car increases in price.

Inflation or greed.

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22 hours ago, longgone said:

How do you distinguish greed from inflation ?

Greed is an emotion that drives the efficient allocation of capital.  Inflation is a concept to measure monetary expansion.  The more competitive a market, the less the possibility to increase prices in that sector - preventing greedy people from raising their prices at will.

Soon we will be in an environment of prolonged deflation, and the firms operating in the least competitive markets may be able to hold their prices up for longer.

There's a real lack of competition in some areas of tech at the moment e.g. search, social media, operating systems etc etc.  Companies in these areas e.g. Indeed, need to be broken up as their pricing power is too great....

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22 hours ago, longgone said:

How do you distinguish greed from inflation ?

Firstly, if one understands money and value, the negative connotation of greed disappears.

Greed is the emotion which drives men to create value and innovate.

Inflation is an increase in the supply of a currency.

Value does not exist.

17 hours ago, Unmoderated said:

Inflation is also good but only 2%+/-1%

State-inflicted inflation materially hurts the poor. Naturally occurring deflation raises the living standards of the poor and middle class the most.

Think about how much cheaper entertainment is today than 30 years ago. Is that good or bad for poor people?

Healthcare and housing are drastically more expensive. Is that good or bad for poor people?

1 hour ago, erat_forte said:

Greed is when one person increases their price and gets away with it.

Inflation is when everyone does.

Poetic, but false.

50 minutes ago, Loving The Crash said:

There's a real lack of competition in some areas of tech at the moment e.g. search, social media, operating systems etc etc.  Companies in these areas e.g. Indeed, need to be broken up as their pricing power is too great....

This will happen naturally, if States stop interfering in our lives.

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16 hours ago, longgone said:

I just wonder how one can accurately distinguish the two.

At what point does inflation turn to unnecessary greed. If a Ford fiesta is made from many individual priced components and a few are just greedy suppliers ultimately the whole car increases in price.

Inflation or greed.

Ah now I see what you're saying. 

Greed induced prices only exists where one has pricing power through significant control of the supply chain (monopoly, oligopoly or cartel). Oil might be a good example where by OPEC can influence the price through constraining output. Oil prices feed into almost everything through transport and feed stock costs. However, they are not the same thing as inflation. Inflation is a monetary issue and should be thought of as a rising tide lifting all ships while pricing power would stand out as a single rising ship (though may lift some others that are close).

So in my rather rubbish analogy greed is a swell, inflation is a sea level. 

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1 hour ago, erat_forte said:

Greed is when one person increases their price and gets away with it.

Inflation is when everyone does.

ultimately this is it. inflation a chain of greed events in which the end result is price increase in product or service.  ultimate inflation is a price increase of necessary goods services and shelter that are required to survive everything else that is optional price increases are only defined what people will pay or just won`t at all.  

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45 minutes ago, Locke said:

State-inflicted inflation materially hurts the poor. Naturally occurring deflation raises the living standards of the poor and middle class the most.

If you follow that through to conclusion it isn't the case. 

In a deflationary environment the poorest would have their wages cut or be laid off as declining revenue squeeze margins or tax take for their benefits. In an inflationary environment companies can sit between increasing revenues and delayed pay rises and that actually improves unemployment. 

All things being equal a low level of inflation is a good thing. 

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8 minutes ago, Unmoderated said:

In a deflationary environment the poorest would have their wages cut or be laid off as declining revenue squeeze margins or tax take for their benefits

Has the massive fall in food prices (i.e. deflation) since mechanisation and automation of the food supply been good or bad for poor people?

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23 minutes ago, longgone said:

inflation a chain of greed events in which the end result is price increase in product or service.

What about the greedy capitalist who crushes raw material prices and wages, resulting in lower prices [deflation]? Is that not greed, because the prices are falling?

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37 minutes ago, Unmoderated said:

What massive fall in (nominal) food prices?

Depends what timescale you're talking about. Food is very cheap by all historical standards (including within living memory). On the other hand it's a long time since there was a famine in the UK, from which you could conclude that the price of food wasn't an issue. Malnutrition == food is too expensive, obesity == food is too cheap, although that's a very big oversimplification (there are a lot of social factors involved and you can avoid malnutrition even if food is expensive by having no money left for anything else).

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7 minutes ago, Riedquat said:

Malnutrition == food is too expensive

Hmm. Do you mean starvation?

8 minutes ago, Riedquat said:

obesity == food is too cheap

Actually, I believe that linoleic acid (vegetable/seed oil) consumption + refined carbs = metabolic dysfunction. Symptoms are obesity, diabetes, heart disease, mental problems, poor immune function. Do those symptoms line up with any crises today?

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2 hours ago, Locke said:

Greed is the emotion which drives men to create value and innovate.

Value does not exist.

WTF? Even your infantile caricatures of human motivation are contradictory.

On a board dedicated to discovering value in the housing market...

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22 minutes ago, Riedquat said:

Depends what timescale you're talking about. Food is very cheap by all historical standards (including within living memory). On the other hand it's a long time since there was a famine in the UK, from which you could conclude that the price of food wasn't an issue. Malnutrition == food is too expensive, obesity == food is too cheap, although that's a very big oversimplification (there are a lot of social factors involved and you can avoid malnutrition even if food is expensive by having no money left for anything else).

Food is cheap in real terms, not in nominal terms. There has not been deflation, but rather inflation and it happens that inflation of other goods and services has increased at a greater rate. However, if we go back far enough we end up getting into growth models. Since inflation is a rise in the price level (or a decrease in the value of a unit of currency) when we say cheap by historical standards we mean it consumes a lower %of our take home pay.

Inflation is a rising tide. If it were equally distributed it wouldn't matter that food increased by 2% when your wages improved by 2%. Improvements in productive capacity free up labour to focus on other areas of production. From field, to factory to tech. 

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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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