Hey there,
The last year or so I keep hearing the term ‘Greedflation’ pop up more and more. The Idea here is that there are greedy capitalists that are raising the prices on goods and services faster than their own costs are increasing and this is causing prices to rise.
Now if I think about it inflation is always based on some price increasing, and sometimes because there is some shock that limits how mch of something is available. Oil is scarce because of some natural disasters or war, food is scarce because of drought, etc.
Most of the time there are other sources of the same resources (different crops), or the resource was horded before (‘strategic’ oil reserves), in both cases someone is able to charge more (eg Profit) from the situation.
So now it sound to me that normal inflation and greedflation are both simply based on one entity in the supply chain increasing the price to take advantage of the situation. Whether you call it greedflation or not depends on whether your personal “in” group is profiting from or or not.
Where is my thinking error here? Is greedflation a real thing?
But what is the market price? If people are willing to pay for it then its the market price. So its adjusting the price to the current demand. There are times where this is unethical for example profiting from wars and disasters, but generally this is how things go.
While you’re correct within the definitions of the words you’re using, it completely misses the point of what Ive said.
I am not sure. If I understood correctly then you separate between price gauging and currency devaluation. But even in the most perfect currency devaluation, where every one in the supply chain would increase their price by exactly the rate of inflation. What would happen to everyones profits? They would also go up.
Im separating them because they are different things. That doesn’t mean they don’t work in tandem. It just means they are different words with different definitions.
Also your statement is incorrect most likely due to operating costs associated since those also go up. But that instance wouldn’t be price gouging.