Why does additional currency issue cause inflation? How to cause

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Additional currency issuance will lead to inflation , But two conditions need to be met ：

    The first is that there are no obstacles to the flow of funds . Funds will flow freely according to the level of interest rates , When a place has too much money , Interest rates will fall , Automatically flow to other places , In this way, the market will eventually form a state of capital equilibrium , The funds in the hands of each market entity have increased ;

    The second is that the money in people's hands will become consumption power . Excess money chasing limited goods , Will push up prices . ( For example, after the epidemic crisis , Deflation stage , Everyone has money , You won't spend , No inflation , Nor worry about material shortages , Will not rush . As long as those things bought by the currency issuer will inflate . Money won't be spent indiscriminately in the hands of the people , But I have money , It will still improve the food a little . Normal inflation . )

    Money here mostly refers to people's total assets , Future wages , instead of Stocks become money .

    In essence, supply and demand determine , Needs are decided by people themselves , People expected , The same money , Different environments trigger different needs . For example, in times of crisis , Keep cash , More money , Won't go shopping , Increase demand , Because that's my original money , Instead, it is tightening clothes and shrinking food , Don't buy what you shouldn't buy , Because I'm worried that my salary will drop in the future . If it is expected that there will be salary in the future , Will spend more , The money sent by international companies goes to their own pockets , It feels like the salary has increased . Will spend more , Supply will exceed demand .

    In the long run , Inflation caused by the central bank's release of water has been going on , But like the current situation in the United States , Even Venezuela's expansion rate , It has never happened in the modern financial environment （ It refers to water discharge ）.+ Generally speaking ,“ Inflation ” Although defined as “ Currency in circulation is greater than the total price of commodities in circulation ”, But actually , The common causes of inflation are ：

   +1. Too much money （ It has never happened in the modern financial environment ）

   +2. The supply of goods is insufficient （ For example, the current price rise caused by the world ）

   +3. Buyers are in great demand （ Such as fried shoes 、 Fried baby 、 Stir frying coins 、 The price rise near the Spring Festival ）

    +1 Don't say ,3 It's quite common, I won't say , Just talk about it. 2, Because it is the current hot .+ Insufficient supply of goods can usually be divided into poor logistics 、 Insufficient production and hoarding . The first two are the supply side , The latter is basically the sales side （ Occasionally, there are suppliers who stock up ）

     + for instance , Prices rose in the United States in the first two years , Is there really nothing left ？ No , It's the truck driver who is short of people . Another example is that prices rose when China closed its cities , Especially in Dalian , Zhuanghe a letter , The price of meat and vegetables soared in Dalian .

      + And what is the lack of production ？ A while ago, the United States said that fried chicken was not handled, so it stopped selling , This is not without chicken , But no one dismantled the chicken , So there is no way to continue production . Another example is that in many places, covid-19 patients need to be isolated at home , Even countries lying flat , You can't stop some people. They are afraid of death and don't want to go to work , The production end is often prone to underoperation , This belongs to insufficient production

The Kuomintang launched a civil war , Military spending surged , Newly printed money , Go directly to buy grain 、 supplies , What if prices go up ？ Print more money .

1、 Additional issue of currency , Those who get the money first use it intensively , Cause the price of this product to rise . Then the seller of the product gets the money and uses the currency , Promote the price rise of related products . Money gradually spreads out layer by layer . But most of the price rises are slower than those of additional currencies .

2、 After the additional currency is fully circulated to the market , Then there is more money , But the overall wealth did not catch up with the additional currency . More money, less goods , Many things seem to become more expensive , Or the money in your hand “ Less ” 了 .

    Inflation exists , We need to buy a few products that are not easy to be devalued by the issuance of additional currency , Such as gold and houses , Make a hedge , In fact, the richest people can avoid inflation . Tax cuts are often just good for the middle class , How to levy taxes on the rich is actually very difficult , But the most terrible thing is , No matter what kind of economic operation or non operation , The bottom of society will always suffer the most , Unless time stops .

    Generally speaking, currency issuance is beneficial , It can stimulate economic development , But if there is an overage , It may cause the following problems ：

  1、 Inflation and rising prices , Money flowing into the market will cause commodity prices to rise , Cause prices to rise .

  2、 Asset bubbles , Due to excessive funds , A large amount of capital flows into assets , Cause the price to deviate from the value , Like real estate 、 Stocks, etc , There may be an asset foam .

  3、 Widening the gap between the rich and the poor . After the currency is over issued , The rich can get more money to invest at a lower cost , Exacerbated the Matthew effect , Make the rich richer .