this post was submitted on 18 Nov 2023
733 points (94.7% liked)

Gaming

2462 readers
301 users here now

The Lemmy.zip Gaming Community

For news, discussions and memes!


Community Rules

This community follows the Lemmy.zip Instance rules, with the inclusion of the following rule:

You can see Lemmy.zip's rules by going to our Code of Conduct.

What to Expect in Our Code of Conduct:


If you enjoy reading legal stuff, you can check it all out at legal.lemmy.zip.


founded 1 year ago
MODERATORS
 
you are viewing a single comment's thread
view the rest of the comments
[–] [email protected] 3 points 11 months ago

In the past, governments didn't have inflation targets. The black friday event involved the government flooding the gold market, dramatically reducing the value of gold. At the time the value of a dollar was directly tied to the value of gold. In hyper-inflation events (that don't often happen in developed countries but do still happen in some countries around the world), inflation may be 50% or 100% or 200%. Sometimes way more.

These days (the last 30 or 40 years), inflation and gold have been decoupled, and instead the government has a target range of approx 1-3% inflation (depending on your exact government, but if you're in a developed country then it is probably close). This was intended as a target that would allow businesses to have some certainty and was low so they could ignore inflation in their forecasts. The original target range was 0-2% set in New Zealand, but as it spread around the world it got slightly adjusted to a 1-3% range.

The governments now try to directly control inflation by changing the cost of borrowing money. You might have recently had inflation hit as much as 9%, but this is nothing like what happened in the old days.