DGPeddler> If enough companies close their doors or move off shore then so many people lose their jobs that the dollar loses it value and prices go sky high.
DGPeddler,
It's not so much the 'unemployed people' cause prices
to go sky high . . . it is the gubberment printing
money to provide 'unemployment benefits' that causes
the high inflation.
Decomposed has tried to explain it . . I think he
blindly believes it in a religious fashion.
Me? I think if the money was being invested - in
factories, or new technologies, we don't get inflation.
(Deficit spending on the space race employed lots
of guys but the new technologies allowed for
productivity enhancements.)
On the other hand - high unemployment and money being
printed and handed out like candy . . . THAT causes
inflation as per the Law of Supply and Demand.
The 'surplus money' creates an increase in demand
but the supply of goods and services is the same so
the prices go up to swallow the extra money being
thrown at it.
Same with welfare. Throw money at it and they will
consume goods and services - but welfare recipients
to NOT produce goods and services so the supply
remains the same while demand goes up - causing
prices to go up.
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