From: Mermaid (hidden@lucifer.com)
Date: Sun Oct 26 2003 - 16:59:05 MST
I dont understand Ophis' and simul's objections to rhino's comments on inflation...when costs of production goes up, lesser goods are produced at higher costs..hencing hiking up the price of the goods...labour costs are one of the most important factors that increase production costs and hence create cost push inflation...so people get paid more and they spend more...because when cost per unit increases, price per unit also increases...there might be more money floating around, but the value of money is degraded as the same amount of money buys 'lesser' value in goods than it used to....this happens *only* if profit margins have to be protected..when losses are absorbed or when there is a slimming of profit margins, cost push inflation doesnt have to occur..but this is unlikely to happen because i havent heard of very many producers who like to run businesses for low or no profits...
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