About Inflation in the United States USD - Economic Overview @abelardobravoh
it is gratifying again to be able to share another of my articles focused on the study, appreciation and deconstruction of economic factors. On this occasion, dedicating ourselves to the valuation of the US economy and its next movements. For this I will describe the current situation of the US dollar based on recent data and news of economic interest.
What to keep in mind
1. Unbalanced printing of money
The classical school of economics applied a primarily Marxist concept for the printing of gold in European nations, for this, taking into account the gold standard (economic reserve before being replaced by the confidence inspired by the modern school) proposing that the total quantities of gold represented in weight were equivalent to the most suitable amount of money in mobilization (printed). So this would be a fully supported amount in economic terms. However, confidence is a sentiment from which some consequences can be derived, among them the loss of global confidence can directly affect the economy, throwing such an example that the gold standard, although it is currently more obsolete, was not so far from what it was. should be.
The population continues to increase, the demand for dollars is greater, the debts are increasing, the amounts of money are increasingly large to make certain payments; inflation exists and this causes that the money reaches less for the payment of the North American way of life. The problem to be faced primarily is oriented to the constant printing of money, which tries to cover the increasingly large sums in payments and debts. But this money in particular does not solve the problems. In economic studies there is a clear reason for the positive to the printing of more amounts of money for the current demand and it is better explained with the following example
Printing more and more money can eliminate poverty, because money meets current demand and we will all be happy and rich.
By giving greater commercial value to the specific currency, we can increase its utility and action in the market.
What's going on? Explanation
If we print more money we violate one of the most important economic laws: supply and demand. Generating more amounts of money on a regular basis increases the amount of circulating money and this makes it less precious, since everyone can access it. In addition to the fact that recent studies associate that the increase in quantities affects the psychology of the investor, providing negative connotations with prices.
2. Substitution of the US dollar as an economic reserve in first and second world countries
Nations are realizing the current economic situation of the dollar, therefore they are taking action. This because they know the situation with confidence and its possibilities. Thus, it is presented as an inconvenience for them to have as their primary backup the value reserves of a nation or several in dollars, since it is a currency that sooner or later may be affected by economic problems thanks to its administration. They are also taking gold as a general investment for their national reserves, substituting gold for the US dollar.
As a result derived from the substitution of the dollar by the recovery of gold as a reserve of value, this directly affects confidence, which is precisely what we had previously discussed in point number one. So, nations replace the dollar for their own reasons and this is represented in loss of confidence and loss of confidence in inflation and lower value of the currency.
3. Increase the minimum wage in EEUU
An example that I often offer about raising the minimum wage is the material understanding of what such action symbolizes. Popular thought believes that "raising the salary will allow the money to reach more" I am afraid to be who says otherwise, and I will explain it with the economic thought of why: "by raising the salary the government is providing a connotation that the money is not enough to cover current expenses in the market; consequently it produces inflation, since the increase in salary only postpones the problem for days, or even hours ".
The solution to this type of problem consists again in commercial revaluation of the currency in international tones through ties, studies, businesses, benefits and developments between nations.
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