this post was submitted on 22 Aug 2023
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United States | News & Politics

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[–] Melonius@hexbear.net 1 points 1 year ago (1 children)

Since the financial crisis banks have taken deposits and reinvested them at the Fed or other banks. Purchases of stock do not necessarily raise prices either. Prices can fall on heavy volume and rise in light volume.

That's a paycut in purchasing power.

Only if prices rise. Consider that this island only sells widgets in this currency. Will they raise prices because the money supply has increased? They were "maximizing" profit before, but now the money supply is different and the employee on the island still makes 20 coins. Will selling widgets at a new price point get them more money?