Inflation explained

Raeez100 Says:

Aug 21, 2011 - Actually MONETARY inflation is the main cause of rising prices.Suppose there are only 10 loafs of bread in the world worth buying. Lets assume the total "currency" supply to be $10. Next year due to better "technology" bread production increases to 12. But the government increases the "currency" supply to $14. So the new price of bread is $(14/12).The government actually supports inflation so that people would put money in a bank to get interest which "protects" them from inflation.

Raeez100 Says:

Aug 21, 2011 - The government does this so that this money in the bank can be loaned to people who really need it like an entrepreneur which results in growth and development of the country. So inflation is a TRICK used by the government so that people would not hold on to their wealth and instead deposit them in a bank as their money is constantly being devalued. Note that usually the inflation rates and interest rates in a country are nearly equal.

Raeez100 Says:

Aug 21, 2011 - The downside is that, the poor man who does not invest in a bank gets screwed up. The money that he earns is constantly being devalued. He cannot SAVE money in the conventional sense.The poor man is literally ROBBED of his earnings. Thats the price we pay for supporting(spoiling) the entrepreneurs.

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circleoftwo Says:

Aug 30, 2011 - This is not at all how inflation works.

Hamking1 Says:

Sep 19, 2011 - All this demonstrates is the dynamic balance of price equilibrium being found in the market. JesseForgione got it right: Inflation is caused by an increase in the money supply. This is surprising easy to predict if you work for the Central Bank. Fractional Reserve Banking practices are really the ONLY inflationary force out there that should be addressed. It dwarfs all other drivers by inflation and it's not even close. see this chart for more: nowandfutures,com/key_stats,html

sai3250 Says:

Sep 21, 2011 - boring explanation 

8peregrint8 Says:

Sep 28, 2011 - gaahhhh this is horribly explained. Inflation is nominal, in other words if price of bread went from 3 dollars to 6 dollars, you could expect wages of the workers to also be increasing. changing nothing!

dick391 Says:

Oct 1, 2011 - Yeah the trade-off you describe between unemployment and inflation only exists in the short term when you assume wages are sticky (slower to adjust then general prices). In the long-term wages must also adjust and therefore unemployment will remain unchanged.

Daski69 Says:

Oct 25, 2011 - how do wages increase?

Atulbarosee Says:

Oct 26, 2011 - songs ? :P

lieschen53177 Says:

Oct 28, 2011 - Inflation is the creation of money, rising prices are an effect but not the root cause.

JustinThought1980 Says:

Oct 30, 2011 - Exactly. Inflation is more and more money chasing fewer and fewer goods. As more money is added, the existing money becomes worth less.

electstar Says:

Oct 30, 2011 - this is not at all about inflation. It's about supply and demand

broncojonnes Says:

Nov 1, 2011 - good intent but not explained properly

heheDawgz Says:

Nov 12, 2011 - Took awhile to get the equilibrium price :P

tricky12321 Says:

Nov 14, 2011 - your music choices are so dramatic

iamjacobnz Says:

Nov 17, 2011 - 160 people are immigrants..

marketanarchist2011 Says:

Dec 30, 2011 - This...just doesn't explain the real world situation. In the real world, you don't have 50% of people employed and sudently 50% more emplyed. THe employlemnt of people usually falls and we have 17% inflation in the last 5 years. THe inflation is the increase of money supply.

eeee184 Says:

Jan 1, 2012 - the music so not suitable for the situation

luffis1985 Says:

Jan 10, 2012 - This is overly simplistic. IF the only thing to buy in the economy is bread, then surely the only thing produced in the economy is bread. If that is the only thing produced then the bakery would be the only employer. If the 5 unemployed guys each got a job it would have to be at the bakery, which would naturally mean a greater production of bread. While their might be a correlation between inflation and unemployement (the phillip's curve), this video does not really explain that relationship.

EmWHful Says:

Feb 2, 2012 - Not only overly simplistic ... overly patronizing...

devilevic Says:

Mar 5, 2012 - This has absolutely nothing to do with inflation, but with supply and demand. One thing has NOTHING to do with the other.

bhushanpawar23 Says:

May 19, 2012 - awesome video