It endures among many economists disagreement. The economy now suffers from inflation or deflation? I would say both. The one excludes the other in my opinion is not - quite the contrary.
The usual theory to be based prices and wages in accordance with the principle of supply and demand. Is an asset in short supply, the demand and therefore prices. Is a good lot availability decreases both. Well, that's not entirely wrong.
In any case, one can for a commodity that is just a lot more money demand than for one that is available in abundance. As you will understand why speculators have no interest in investing in the production. Would rise because of increased production the offer, the price would fall. Money but can be done much better by creating a shortage, and the cost of the investment saves you also then - the money thus obtained can then contribute to the global casino asked if it goes wrong to 'social welfare' ...
An even smarter tactic is to borrow the money to others who gamble then. Remains in the background is nice if you can access by the public under the arms. Just as, for example, the German bank that was one of the main creditors of the HRE 100 billion euros 'social welfare' was directly transferred into your account.
Many already know that new money comes only as a credit in circulation. If this money is not flowing into the real economy, for example, as Investment in the production is, thus ensuring that production increases with the increased money supply, the money is, of course, inflationary. For a higher money supply is no higher amount of goods and services available.
goes further, to when the loan is 'paid back'. While true, the term 'back pay' is not quite right, because it was indeed borrowed from the outset really nothing. Basically, it's actually even consistent when the a priori existing money will now never erased from the books. At least it was in the ideal case, if it were squandered not only pointless, but has provided a more in goods and services and thus a higher social benefit, performs an important function, even though it now no longer there. However, it is now missing in the economic cycle. Another problem arises when the interest on the loan (ie for the loan from the outset not existing money) due. Because the money will be for the interest must already circulating the global flow of money (which also consists of loans) taken - it tears a new hole and then missing in the economic cycle. Unless someone takes on a new loan, which fills the gap again. But even for this loan will eventually be interest due. And so on and so on ....
A credit is of course only if the creditor profits of the borrower promises. This will become increasingly difficult, to the extent that the money supply shortage in relation to the volume of goods. Although the money supply increases, and exponentially - it can not have too many goods and services are created to keep up with a compound step (that would be of environmental problems does not make sense). But due to the constant outflow of money from the real economy because of the furnishings evoking interest (which flows as a return on the accounts of shareholders), would also lower in relation to the goods existing money supply. Thus, despite the ever increasing money supply is less and less money in circulation to purchase all goods. Companies do not sit on their goods, or they have to sell below the production price. Since they make no profit on the duration as to make bankrupt especially smaller businesses. Workers are 'released'. It circulates even less money. Large corporations, which often gets stuck with the banks in cahoots to get, but more and more loans and can be as small providers compete on the table ...
But again back to the money problem. In some Economics books claimed that the reason for the misery and the constant is up and Abzyklen in the economic cycle due to the fact that wages if the employee is not until the price has reached its optimum, sell its goods back and again can make a profit. For them, the unions of the brake pad in the whole economic life. Here, they completely ignore that the price above all not to fall so endlessly, because business is usually so the interest charges for borrowing already has to bear. And of course, falling under any circumstances - on the contrary, because of compound interest to grow exponentially! It is usually the interest and not the increased demand, which provide for the regular price increases. Since workers are due to the increase in interest rates less money available and therefore buy less able to see the companies often forced to sell their goods, despite increased costs (interest rates) and still provide cheaper to cut prices.
What happens then? The loss for the falling Prices must be pressed out of the employee wages, as earnings expectations increase the bank's shareholders, despite the declining lack of money demand continues exponentially. But as the work beneficiary but not only are those who provide the services available, and so the out of nowhere scooped money from private banks to lend only its value but also those who provide the demand, in spite of the falling prices are always less purchased. The prices need to fall further, entrepreneurs make a profit more and go bankrupt. Workers are laid off. It will thus have fewer goods and services sold. Despite rising money supply, which is thus inflationary, missing more and more money in the real economy, which whirls deeper into the crisis.
What would be the solution? Within our existing monetary and economic system would have the excess money lying around, useless to the accounts of shareholders and holders of large financial investment be absorbed by taxes and returned cautiously to the economic cycle. Since it is inflationary, and there are a lot more money than you can buy for the money may not flow into the economy without thinking, because it might actually be a runaway Inflation to come. Rather, the real economy have time to adjust to the production and the supply of services to the increased money supply.
it would be seen purely economically rational to introduce minimum wages or even better, the employees as to ensure that they work, who are paid too low to accept not only must (eliminate so Hartz IV sanctions and to increase the rate of welfare). Rising wages especially for those who now earn the least and higher welfare rates would stabilize the economy. Because the economy would then grow most stable if those who have least to get most everything, because they save almost nothing, but everything would spend. The run in the last decades economic policy that has betrayed the workers by their larger parts of the profits of their social outcomes are not only unjust, not only unreasonable - it is highly absurd and irresponsible!
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