This video examines how economic concerns in the first half of 2025, particularly around tariffs and price increases, influenced consumer spending behavior in a phenomenon known as “doom spending.”
The video mentions “doom spending” as purchases driven by fear of future price increases. How does this behavior relate to money’s function as a store of value?
“Doom spending” directly challenges money’s function as a store of value. When consumers rush to make purchases due to fears of future price increases, they’re effectively demonstrating a lack of confidence in money’s ability to maintain its purchasing power over time. Money serves as a store of value when it can reliably preserve wealth between the time it’s earned and when it’s spent. However, in the video, we see that tariff concerns and inflation expectations influenced some people to convert their money into goods immediately, rather than holding onto it.
This behavior indicates that consumers believe physical goods will better preserve value than the currency itself. By purchasing items now that they anticipate needing in the future, shoppers are essentially using those goods as an alternative store of value. This creates a circular problem: the rush to spend accelerates demand, which can further drive up prices, potentially validating the initial fears and further undermining money’s store of value function. This illustrates how perceptions about money’s stability can significantly impact its effectiveness as one of the three key functions of money.