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Basarav t1_jdrbj7h wrote

More money out there to buy the same number of products, causes the purchasing power of the currency to go down, therefore prices to go up because now you need more of that currency to buy the same product.

An amazing book that explains all of this is “A primer on money, banking and gold” by Bernstein

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mindless-bottleman t1_jdrbscs wrote

And don't interest rates create money without even needing to print it in mid-term?

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Basarav t1_jdrey4k wrote

Technicalities…. The treasury creates money, the FED with interest rates makes it available/cheaper to borrow so it hits the open markets which is us consumers…..

Low interest rates makes people borrow/buy shit, which makes the economy hot which creates inflation…. Raising interest rates os the break on that heat and inflation should slow…… but all these decisions take time to hit the consumers, sometimes months and even years….. depends on too many variables to nail down when/how/how much they will affect

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