#1412 James Lavish | Bitcoin & The National Debt Crisis
The Pomp Podcast
Understanding Inflation: It's About Perception and Money Supply
The long-term equilibrium interest rate, known as R star, should ideally neither stimulate nor hinder economic expansion. Current inflation levels are tolerated because the public is not visibly agitated about the gradual loss of purchasing power, contrasting sharply with countries facing hyperinflation. In the U.S., despite ongoing inflation, societal unrest is minimal, suggesting that people accept a slow erosion of wealth. The significant metric for understanding inflation lies in the growth of the money supply, as indicated by M2, which has risen over 7% annually since 1971. This figure presents a truer reflection of inflation compared to the Consumer Price Index (CPI).
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