Topic: Inflation overpowers the value of money - page 6. (Read 948 times)

How investing in bitcoin helps avoid inflation. The price of bitcoin goes up and down. There is no certainty that the price will constantly recover. The price may reach its limit and bitcoin may be abandoned, pushing cheaper assets into the mainstream

I see to your point,since government own fiat,they will use it to manipulate the economy so that the poor ones will remain poor and depend on them for a living. With this,the government will easily make the poor ones dance to their tones by making them surrender to their government with harsh economy. It is only the wealthy ones that are safe from inflation because no matter how high the price of commodities are,they will still afford it without a problem.

In my country, some people talk about the "inflation of the excuses": Ukraine is at war? let's increase the price of everything; people keeps buying? let's keep increasing them.

I would add a new reason to the list: the negotiation power of consumers against big companies is decreasing exponentially due to modern metrics. For example, big food chains can calculate with great precision the price consumers are willing to pay for a given product thanks to, for instance, fidelity cards (not to talk about the effect of increasingly sophisticated marketing tactics). We all know what happens in any negotiation when a party has more information than the other.

In addition, I recently read that it more effective to address the 20% of heaviest buyers who purchase the 80% of the goods than to target more of them. So, it doesn't really matter if you don't buy because something seems to expensive to you: even if seven more people out of ten did the same, it would still be profitable for the big company, who won't lower the price, until you realise that if you ever want that item you'll have to pay the excessive price they ask for it.

It depends the country you are living, inflation can't be overpowered money but the thing is that I understand that because of the rate of inflation now you may conclude that inflation over power money, but I don't believe such because their is multiple ways money can over escape inflation, you can escape inflation through investing to a place inflation will not affect and investing in bitcoin should be one of the roots to escape inflation as I assumed.

This doesn't cause inflation. If there are shortages of supply causing a rise in demand and, in effect, the prices of a particular product, the market will respond by ramping up production and the prices will begin to stabilize. You'll see cycles of this happen in a lot of sectors. For there to be significant inflation, you would need shortages in many sectors combined for the overall CPI to be significantly effected.

There is this you must know about some countries especially Nigeria, the importation rate in our country is really high especially when nothing is functioning in the nation, but they kept borrowing money for no reason and I can't specifically say this is what they are borrowing the for or how often they had to utilized those borrowed funds to boost our economic growth. Take a good look at Nigeria, this is a country that is so industrious and resourceful filled with energetic people who are always creative to even independently do their business without the government supporting them financially or create employment opportunities for her citizens.

I would say that in order to address inflation and promote economic stability, governments must adopt prudent fiscal and monetary policies, encourage investment in productive sectors and promote transparency and responsibility in the management of public resources... On the other hand, an important point is to promote financial education so that citizens… this would be essential for them to understand how to manage their resources and make informed economic decisions.

It is clear that inflation and lack of purchasing power can have serious consequences for an economy. The causes they mention are important factors that can contribute to the problem, such as the lack of coherent economic policies focused on local development can encourage the importation of goods instead of promoting national production. Exce imports can increase the demand for foreign currency, weakening the domestic currency and contributing to inflation. In addition, irresponsible borrowing and without a clear plan to generate sustainable income can lead to an unsustainable accumulation of debt, causing more inflation...

I believe that all of that is not that simple. If a country doesn't have inflation, it can sometimes be viewed as a sign of stagnation of the economy. If the inflation rate is high, it's obviously also a big problem, bigger than close to zero or negative inflation rate. But if inflation is fairly low and stable over the years, many think it's a positive thing that encourages people to spend instead of saving, boosting the economy further.
And with other things there are different opinions and cases as well. If a country borrows a lot but never defaults on the foreign debt and keeps using the money to invest into its own economy, it can go fine. If the country relied on imported goods, it can be fine as long as there's something valuable that it gives back to the world and there's a low chance of supply line disruptions.

I disagree with this on many levels. Rich don't hoard fiat money for long time periods. Most of their wealth are tied to land, stocks and other valuables. Some assets are more illiquid than others. Every rich person knows that it wouldn't make sense to hold majority of it as in fiat money.

Because, while you are correct that it loses value and is inflationary by design, it hasn't designed to hold value in a same way other assets like gold. There's a reason why US moved out of gold standard... Because it was easier to control the economy during crisis when they have buffer to do it. However fiat money is excellent tool for commerce and economy. It's highly liquid and people can use it to transfer or hold it from large to small sums for a medium period of time and the value of it stays rather stable no matter how much you are dumping it. Even if you liquidate all your holdings to fiat money. Same can't be said about stocks or other assets. If you dump large amounts of them, it affects the value instantly.

IMHO fiat money is a misunderstood tool and if you would get rid of it, it would be way harder to run economies of any country.

What you're talking about is a good inflation though which is around 2%-4% I think but most of the time it's always much higher so even if you're to defend that inflation is an integral part of the economy, the point still stands that a lot of country always gets past the good inflation and so it always gives the notion that inflation is bad, and don't get me started on the wage gap in order to keep up with the inflation, if that gap isn't that far apart, I am sure that we won't have any talks about inflation being a bad thing.

I think deep down, everyone knows that the solution here is to make fiat a limited supply and that the Federal Reserve can't create an infinite amount of money in order to increase spending. Reckless money printing is causing this shitstorm but they still continue to do it.

It overpowers that’s why it inflates actually. Government is not the only factor in everything or all the time. Over the years people has gotten way out with the taxation. It matter a lot when you are running a nation and you don’t have fund because people are avoiding the taxes. USA itself is in such high debts that they can’t even recover it in next ten years. Imagine a country like that without a solution is something furious around the world. I completely agree all the above facts mentioned in the OP but sometime as living thing we mess up too. All the burden comes to printing money out of thin air and thus making things even worst. Agree or not this has some effect for sure.

Inflation exist because of fiat, for me they are just one.

Anything that can be control by the government can be manipulated by them, and makes thing worst without them being exposed of taking this kind of problem as an advantage to take their people's money. The higher the inflation, the more taxes they could gain for the entire population of their nation. Only wealthy people are not being affected by inflation, only the poor ones suffer and the Government doesn't even care at all.

Well, they'll do little something about it just to show the public they actually "care" and they're "doing" their job as public servants.

Inflation is currently faced by different country and the percentage of it are continuously increasing of course not all the country are part of the third world that has a good kind of management by the government, some of the country need to seek more money just to sustain their economy and one of the best option is to borrow money to the largest countries funds, after that country who have a lot of debt makes more suffer if they cant pay at all or else they need to give some shares or depends on the agreement of the countries, reason why if this inflation increase the salary must need to increase too and not only the expenses of the people.

If the imported goods are cheaper than the cost of domestically produced goods, then there's no reason for the government to boost domestic production and lower the import. The government policy of protectionism can also cause inflation.
The biggest reason for inflation is money printing gone by the central banks. Every other factor is a byproduct of money printing-including high energy prices and government debts.
Many economists state that inflation is better than deflation and that the economic growth is impossible without a healthy level of inflation(somewhere between 2% and 5% per year). I don't know whether they are right or wrong.

The question is do we have the right to elect who runs the country, or is everything pre-arranged and our vote a disguise? Moreover, when campaigning, they always show themselves as good people, but when they achieve their goals, their true nature is revealed. As a human being, I believe that there is no one without greed and ambition, so relying on others, the government has never been something that I think about.

I agree with what Franky1 and Darker45 have said, inflation is an integral part of the economy, it exists and works according to its original design.

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Borrowing is not a bad economic policy because almost every nation borrows. But the most important issue is how the borrowed fund is used. Borrowing to fund capital projects like infrastructures is a viable economic direction. Infrastructural development will improve the local production of goods and services. A country that has good infrastructure will encourage local investments and attract foreign investors. An increase in business activities in a country will lead to the creation of more employment opportunities.

But borrowing will cause inflation when funds are used to finance recurrent expenditures. My country used borrowed funds to pay workers' salaries and service former debt. This type of borrowing will cause inflation and destroy the economy of the country. The most wicked kind of debt is when politicians borrow to steal. Most of these lending organizations sometimes ask nations to devalue their currency as a criterion to access loans. The poor will suffer the consequences of inflation, while politicians will transfer these borrowed funds to their private accounts through diverse fraudulent means.

Frankly, the fragile economy was clearly exposed when the epidemic broke out, many obstacles caused the old system to collapse leading to the default of many businesses, the employment situation was also not good because as a When one thing goes wrong, the whole system suffers from the same predicament. There are things that I feel strongly about here is that fuel prices go up when the economy is tough, the inflation story really has a lot of problems around it, but overall what I'm looking at here is not is a financial purge, not adapting to the trends and in need of changes will be left behind.

I'm not sure the economy will be the same in each place, but from the perspective of the area where I live, from the issue of employment, product consumption, prices, ... it seems that everything is still not too broken crumbs. It's also possible that with the economy on the rise, the growth rate here is still a pretty good thing, compared to a few years ago. And moreover, some of the currencies that I use or rather the national fiat have always been seen as surprises in the international market, but it is clear that the current economic development policy is still at a sufficient level maintenance and more. But the general context story at present, the world is facing different problems, and it seems that they are all related to each other, perhaps we still need a lot of different solutions to go through this phase present.

You are talking about inflation from a macroeconomic perspective, which is the economy that focused on national income and the economy in a country or in a larger perspective. Here, the role of individuals is to put pressure on state leaders to take a specific monetary policy or to re-elect the president and ministerial staff responsible for monetary policy. Global inflation is not a bad thing, it means that things gain value and therefore more people will start trading and investing, but inflation must be healthy and within manageable limits such as 2% to 5% in most countries, whenever inflation is out of control whenever citizens start in the complaint.

From the perspective of the individual, he cannot make major changes to macroeconomics, but he can reduce the impact of hyperinflation by reducing spending, focusing on investment, and learning a new skill that enables him to increase his income.

Excessive government borrowing occurs when there's an unforeseen calamity that causes damage to the country or anything related to it. However, the other bad side is when the government is not able to carefully evaluate its loans, resulting in an inability to match collections with payables, leading to high interest or penalties. Consequently, the country will suffer.

In short, we need to elect people who are capable of running the country and who are not corrupt. Even if they are very smart, if they don't have the attitude to honestly run the country, the nation will suffer. They will get rich while the people who pay taxes do not benefit from the taxes they are paying. This is probably what happens in our country, where corruption is rampant from the higher to the lower levels, leading to a degradation in the quality of service provided by the government.

I just focused my explanation on this because I believe that it's the root cause of why high inflation happened.

Yes, excessive borrowing can cause a high inflation to a nation because we have saw how many countries struggle to overcame this attitude of borrowing money that made them to lost some of their expensive resources just to ensure their name be erase among the countries that are in debted. Once there is unwanted domestic production in a country, it hard for such country to overcome inflation because that is some of the road for inflation to have access to a country and put the citizens into hardship through out the year. Bad leaders can also cause inflation in a country because once they have access to loot the government money, it will cause massive inflation that will take the government many years to recover.