INFLATION, Explained in 6 Minutes

Why Everyone is Worried About Inflation
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I’m hearing a lot about inflation lately, so I want to break it down. What it is. Why it happens and it means for all of us. I hope this is helpful!

Thanks to all my macro Econ professors.

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Johnny Harris is a filmmaker and journalist. He currently is based in Washington, DC, reporting on interesting trends and stories domestically and around the globe. Johnny’s visual style blends motion graphics with cinematic videography to create content that explains complex issues in relatable ways. He holds a BA in international relations from Brigham Young University and an MA in international peace and conflict resolution from American University.

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Comment (37)

  1. Thanks for being here everyone.
    to all the economist watching: I KNOW I KNOW I KNOW there's SOOO much more complexity and nuance to inflation. my purpose here is to give the broad intro into the root idea of inflation especially as it pertains to this round of inflation. condensing what could be 12 years of higher education into 6 minutes.
    -Johnny

  2. Short fast explanations like this reinforce multiple misunderstandings. I wish you would have spent more time explaining what velocity of cash is, how it fell substantially and what would have happened if the government didn't issue checks.

  3. 9:00 I am little tired of people crying about "hyperinflation" and the US dollar. Clearly, they do not understand what hyperinflation is.

  4. Inflation is the ultimate regressive tax. It hurts the poor and those living on fixed incomes/savings (ie, the retired). It benefits… Largely those with the largest debt (the federal government) and the people who get the "new" money first (Banks, and then people who are already rich). Inflation is literally the rich getting richer and the poor getting poorer. The book "Economics in One Lesson" explains this plainly and in great detail. As long as the Federal Reserve maintains these policies, we will continue to see the wage gaps increase and the dream of living a decent life slip through more and more people's fingers.

  5. But how does the war affect all this? Cause that's all i've been hearing about at least in my country, they're all blaming the war in ukraine for the increase in prices

  6. I knew i saw you somewhere before this channel, yeaaa lol i saw the vox video before discovering this channel πŸ˜‚

  7. this idea that the economy is growing when in fact it's just keeping up with increasing costs is an illusion. You become richer, that is the economy grows, when you spend less than you earn and you accumulate the surplus or the surplus is converted into assets you did not have before. But if prices rise and your salary or work increases to keep up you are not getting richer, that's a fantasy

  8. Can you make a video abotjt has Gas/oil prices? Why are we still importing oil from Russia when The US has so much oil?

    Excellent Video as usual!

  9. This is how inflation works in its entirety. It starts with low production because of scarcity. Businesses raise prices. Therefore Fed raise interest rates for business growth. The Fed injects more money into the economy to stimulate growth. Although some people buy rather than produce. Anyhow growth of new production. To lower prices. This is inflation.

  10. This video explains inflation from a perspective that is very specific for the US, however is not true for most countries, as inflation can not only originate from too much demand but also too few supply. We actually see this since quite some time, as a consequence of repetitive shutdowns in China and other countries. Furthermore right now there is also a war that Russia started with Ukraine, which aggravates production shortages especially in Europe, as many european countries are very dependent on Russian gas and oil, which is phased out right now. Also a huge number of agricultural products which normally comes from these two countries is also not exported. (e.g. wheat, mustard and vegetable oil) This however means production is getting more expensive, as resource costs rise (which is a bigger problem in Europe but probably also β€œsomewhat” true in the US).

    Most governments didn’t gave everybody tons of β€œfree” money (or at least not to the extend the US did), however inflation is a problem in many countries. This is not because of too much money but decreased production (from China) and increased costs of resources, which trickle down the production line.

    Therefore the bigger picture is that there is a substantial reduction in worldwide production, which is not simply solved by increasing the interest rates (which will in turn decrease investment and consequently slow down growth further).

  11. It would be interesting to see you make a video about Donald Rumsfeld and the 2.3 Trillion American dollars that suddenly vanished right before 9/11

  12. Glad I found this, I actually have a decent understanding that isn't just dollar worth less, I know why its worth less now (It's not companies just raise prices).

  13. I love the comment section with all the international voices, chiming in from different stages of inflation. the internet living up to one of its promises.

  14. Inflation has more causes. You’re right about this one cause but monetary policy like printing money also leads to inflation as well as supply reductions and other factors.

  15. 2nd incorrect point.

    Inflation is not "a natural apart of economy"

    Communist sates had no market crashes cuz they "removed inflation" or the problems with inflation with a state-market plan.

  16. lower interest rates means prices, salaries and everything can be lower because it is easier to pay off the loan and still make a profit and/or have enough to live. This guy knows economics like my cat and I don't have a cat.

  17. GOV did not give FREE MONEY, most agencies are asking for it back….

    Do u just cheery pick facts Johnny boy?

  18. What about these Millionaires and Billionaires getting Welfare Checks. Are politicians Just a Bunch of Dopes / 100 million for one fighter Jet F-22

  19. Venezuela is undergoing inflation because of decreasing oil reserves. Venezuela used to have one of the highest oil reserves. A threat to USA national security. USA imposed sanctions upon them and took some of their oil.

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