YouTube has the video What causes inflation? Economists Radhika Desai & Michael Hudson explain.
In this episode of Geopolitical Economy Hour, economists Radhika Desai and Michael Hudson discuss inflation: what it is, what causes it, and what are the problems in how the Federal Reserve and other central banks respond to it.
They start off with the point I have been making for years. The rise in asset prices like the stock market prices is a form of inflation that everybody likes. There is no complaint when stock prices rise.
In the comments I inserted this.
Let me see how people here take to my explanation. Private banks do not create money. They create promises of money. The promise is that if you ever need “real” money from the private bank, they will find enough “real” money to satisfy your needs in the form of Federal Reserve Bank money. One example shows what I mean. When you go to a bank’s ATM to withdraw money, you get Federal Reserve Notes. You don’t get anything that represents private bank money.
Another question to ask, is “If private banks create money, why don’t they just create more of it when there is a run on a bank?”
What is it that the Federal Reserve Bank creates that satisfies the demand that private bank money cannot satisfy?
Where is the debt that came from the trillions of dollars the fed created to stop the crash of 2008/2009? The only debt was the USA government’s promise that you could pay your taxes with Federal Reserve Bank money. Why did China need so much Federal Reserve money when they were not subject to USA taxation?
You can find the transcript on the Geopolitical Economy web site article What Causes Inflation?.