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this post was submitted on 08 Sep 2024
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Asklemmy
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Usually "expensive money" means that it's hard to borrow.
"Devalued" refers to purchasing power. "How much food will $1 buy me?"
They're describing different things. In terms of the economic relationships that result in the current scenario, I'm not even going to try. Ignoring that we don't really know and a lot of traditional economics rely on the assumption that actors are rational (which we now know is absurd), I'm far from an expert in macro-economic theory. Systems are complicated.
Ah, I see. So being "devalued" is like mixing base metals in your gold coins, while "cheap money" is like loaning out the treasury. Both contribute to inflation, but in different ways.
Not quite. Cheap money is more that a loan doesn't cost that much money to pay back. It isn't the treasury loaning out the money, but individual banks judging based on inflation.