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Showing posts with the label deflation

Just my thoughts #0834

There are two primary approaches to creating something: bottom-up design and top-down design . Top-down design is often seen in architecture. People do not build bricks randomly; instead, they follow the design drawings created by the architect. This method executes a plan that has already been established. When asked why something is built in a certain way, the answer is usually that the blueprint dictates its design. Conversely, bottom-up design does not start with a fixed goal, but rather involves setting and implementing small, actionable rules. For example, termite nests follow this approach. Small termites have a simple rule: to pile up soil. They do this without knowing the reason, but over time, the finished structure is remarkable and sophisticated. The appearance of the Sagrada Familia church , designed by Antoni Gaudí and still under construction, closely resembles a termite nest, differing only in size. Setting goals and planning is one way to create, but actual achievem...

Just my thoughts #0823

Pricing Power : The phenomenon where the value of money falls below the price of goods is called inflation , and it is said we are currently in an era of inflation. However, it’s not that simple. Inflation is realistically characterized by prices not rising all at once during an inflationary period but rather increasing rapidly for some items and slowly for others over several years. This phenomenon is known as the ‘ Cantillon Effect .’ In other words, inflation is neither uniform nor regular. Conversely, when prices fall below the value of money, it is referred to as deflation . To survive deflation, companies must innovate, often by reducing costs and expenses. During inflation, rising costs must be passed on to other economic agents through increased prices, a concept known as Pricing Power. Since companies cannot pass on all the rising costs, many go bankrupt during periods of inflation. - Joseph’s “just my thoughts”

Just my thoughts #0603

Wealth is the state of accumulating added value. Most of us consider money a tool for accumulating value, but there are many other forms in this world. However, all other values are typically expressed as ‘price,’ which is a value compared to goods in terms of money. Therefore, a preconceived notion exists that most means of accumulating value are strictly monetary in nature. Nevertheless, various tools for accumulating value are available, such as jewelry , luxury goods , bonds , and real estate . The value of goods produced by labor is referred to as ‘price.’ Labor can only be directed toward production when the price level is slightly higher than the value of money. Hence, it is normal for prices of goods to continue rising. If they rise excessively, it leads to inflation ; on the other hand, if they fall below their value, it results in deflation . There is a problem between the gaps. - Joseph’s “just my thoughts”