Friday, June 11, 2010

Where did my money go?

If Money (Dollars) is supposed to be a signal or symbol that identifies the value of thing in order to literally compare apples to oranges, (the specific number is actually arbitrary; it is all relative) AND a large force, such as a nationwide wage rate increase, or price fixing on any significant portion of the economy simply shifts said arbitrary number causing inflation. But, because the people holding currency still only have what they were already holding, their buying power simply decreased. In other words if you had 10,000 dollars and that bought 6 months worth of groceries and utilities, now that same 10,000 dollars can only buy you 4 months of groceries and utilities. Even though the supply and demand is unchanged. Nobody “took” your dollars, they just robbed from the value of each dollar. SO who now has your value?

A) The Government (it’s not a tax though)
B) Only the people that benefit from the price fix or raised wage rates
C) Nobody, we all lose

No comments: