Risk of Inflation in Economy. - page 2.

bryant.coleman

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Quote from: Dragonfund on August 05, 2021, 11:47:31 PM

There are also natural disaster that contributes among inflation which sometimes beyond our capacity.

Drastic times need drastic measures. But at the same time, the governments should not use such situations as an excuse to implement their radical policies. Look at what is happening in the United States. It has been only a few months since Joe Biden took office. And he has already announced trillions of USD worth of additional spending measures. And from where the money is going to come from? He has proposed a few measures, that looks unrealistic. So in the end, to cover the deficit they will either issue more treasury bonds, or print more banknotes.

Dragonfund

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Quote from: Koro-Sensei on June 15, 2021, 12:58:54 AM

There are several factors that Government could do to fight against inflation. They could use wages to lessen the growing inflation and if necessary reducing the printing of money in a year. The problem is that some governments are incompetent enough to sought these things and some are blinded with money. These are the reasons why most countries are suffering inflation.

It's actually easy behind pad and say whatever opinion everyone has with something but that's entirely different from been in the action, the heat alone wouldn't make you think something things, that's what government face sometimes especially criticism from opposition parties.
I know the Government can limit inflation because, if you compare countries performance to one another, you will observe that inflation in some countries a few way higher than others but the truth is, as long as fiat money is still in circulation, there would be some inflation.
There are also natural disaster that contributes among inflation which sometimes beyond our capacity.

Sithara007

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^^^ Countries such as Zimbabwe and Venezuela always had high inflation. Another way to look is to see how the annual inflation rate has changed recently. For Venezuela, such high levels have remained as such for many years. Most of the population no longer use the national currency and they know how to deal with hyperinflation. On the other hand, in the US, the inflation rate has remained at 1-2% until 2017-18, and now it is higher than 5%. It makes a major difference to the population in the US, if the prices go up by 20%-30% in just 4 years or so.

LUCKMCFLY

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I think that the most extreme inflation is that of Venezuela and although they say that it is at 6500% it is much more, in fact, today they are doing the third monetary reconversion to be applied for October 1, which, in total, they have taken away Since the first conversion 14 zeros, now 6 zeros have been removed from the currency.

Source: https://es.statista.com/estadisticas/495527/paises-con-la-tasa-de-inflacion-mas-alta-mundial/

Some experts affirm that if it is not accompanied by economic systems and radical measures, inflation will be much more brutal, I think that this is simply a wash of warm water for everything that is being lived, since the country is not even with the Bolívar currency but are handled are dollars, this is fictitious.

I think that for now no country can come close to the madness of the economy that Venezuela has, where everything is a mess and each person lives their day to day differently, so inflation is no longer surprising, it is just an ideal mirage that makes the government look.

bryant.coleman

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Quote from: Clairvoyance on July 18, 2021, 02:08:33 PM

Inflation is inevitable in this fast growing economy we are living in. Especially in the light of this pandemic, one country might handle it better than others. We will see more third world countries cope up last due to increasing number of infection rate and budget dwindling down. Moreover, we might see better days ahead with the sudden influx of vaccines coming from different countries helping to end this pandemic.

I would prefer an economy with zero inflation. But I know that it is not practical to expect something like that, since the governments nowadays favor big spending. So at the most, we will get a situation where the inflation rate is under control (i.e less than 5% per year). But given the pandemic impact on the economy, even that target seems to be unviable. Monthly inflation in the United States is now close to 1% level. And in the third world nations, it can be much worse, although the real picture will be revealed only after a few years.

Semar Mesem

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Quote from: Iphomme on May 18, 2021, 09:19:07 PM

Our economy change drastically and very tangible of the eyed of everyone. We can not control the economics cycling in out of the world. More people suffer that can not afford to buy due of high demand of the prices the situation of the poor status it's getting vulnerable so it is really hard when we're in point of the high inflation more risk we can experience.

The first risk is rising food prices, everyone needs food and this makes everyone have to think extra to meet their daily needs, in my country there are many economic problems because inflation continues to increase, purchasing power decreases so that many companies close their businesses.

Clairvoyance

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Perceiving events in the future and beyond

Inflation is inevitable in this fast growing economy we are living in. Especially in the light of this pandemic, one country might handle it better than others. We will see more third world countries cope up last due to increasing number of infection rate and budget dwindling down. Moreover, we might see better days ahead with the sudden influx of vaccines coming from different countries helping to end this pandemic.

Sithara007

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Quote from: boumalo on July 17, 2021, 10:17:01 PM

0,9% in June
https://www.bls.gov/cpi/

There are supply chaines problems and a portion of the inflation seems transitory but it is very likely the prices will keep going up

0.9% per month is equivalent to >10% per year. And from the charts that is given in the above mentioned website, it looks as if the increase is primarily driven by the spike in crude oil prices. Energy prices have gone up by 24.5% during the last 12 months period, mostly due to decisions by the Biden regime to help the OPEC (suspension of the Keystone pipeline, banning of fracking on federal lands.etc). Food prices have increased only by 2.4% during the same period. And within the energy sector, energy commodities have gone up by +44.2%, while energy services have seen only a +6.3% rise.

boumalo

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Quote from: boumalo on July 10, 2021, 02:29:24 PM

There are so many evidences of inflation at the moment, starting with the official CPI in the US.

https://www.bls.gov/cpi/ 0,6% in May 2021

The release of the June number is July 13th

0,9% in June
https://www.bls.gov/cpi/

There are supply chaines problems and a portion of the inflation seems transitory but it is very likely the prices will keep going up

bryant.coleman

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Quote from: fillippone on July 14, 2021, 06:22:46 AM

In the meantime the US CPI hits 5.4% on a YoY basis:

U.S. consumer prices post largest gain in 13 years; inflation has likely peaked

>5% is very significant for the United States. The return from the US treasury bonds is around 1.2% per year, and the high inflation rate may create issues for the US government. If there is such a huge gap between the bond interest rate and the inflation, then the demand for bonds will subside and the government may find it hard to increase its federal debt without indulging in unlimited printing of banknotes. And this comes at a time when Joe Biden has unveiled some big spending plans (for which he need >$10 trillion in the next 4-year period).

fillippone

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In the meantime the US CPI hits 5.4% on a YoY basis:

U.S. consumer prices post largest gain in 13 years; inflation has likely peaked

Quote

Consumer prices increase 0.9% in June
CPI accelerates 5.4% year-on-year
Core CPI surges 0.9%; soars 4.5% year-on-year
Used car, trucks account for more than a third of CPI jump

Highest level since 1991.

Inflation is here.
Transitory or not, this is a hidden tax on everyone assets.

Vishnu.Reang

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Quote from: mckinleeanael07 on July 13, 2021, 11:15:52 AM

Since the outbreak of the pandemic until now, the prices of commodities in my country have increased, the life of farmers like me is really quite bad, life is difficult, the pandemic leads to unemployment. If you don't go anywhere, you can't do anything, so where can you get money to buy food, food, etc. while the value of the goods was increasing, I felt miserable.

You have mentioned that you are a farmer? In that case, inflation is more beneficial for you, right? The price of your agricultural produce will go up, and in the end you will be left with more cash in hand. I understand that the expenses also might have gone up - such as transport, fertilizer and pesticide. But the increase in price of output should more than make up for that. In my country, the farmers are more worried about aspects such as lockdowns and restrictions in movement, and inflation is not a big issue right now.

mckinleeanael07

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Since the outbreak of the pandemic until now, the prices of commodities in my country have increased, the life of farmers like me is really quite bad, life is difficult, the pandemic leads to unemployment. If you don't go anywhere, you can't do anything, so where can you get money to buy food, food, etc. while the value of the goods was increasing, I felt miserable.

Xinarae*

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As the amount of inflation rises so does the price of all food items in the country which puts the country's economy at risk and puts people at greater risk. The overall economic situation of the country is positive major key indicators are improving one of these is the decline in remittances and the growth rate of remittances and exports and the rise in inflation. Everything is in the hands of the government if the government wants it can reduce the amount the country's economy is not progressing according to its true potential. Progress in the productive sector is being hampered by lack of infrastructure and inadequate supply of gas and electricity.

breathlessz

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Quote from: Sithara007 on July 12, 2021, 10:00:12 PM

Quote from: AndySt on July 12, 2021, 06:47:10 PM

You will also compare with negative oil prices and get a catastrophe in inflation in general Grin

Please let's not forget that oil prices are a separate, slightly non-market story, when prices collapse and rise several times and even go into the negative side, so I don't quite agree with oil prices as arguments about inflation. To some extent, I agree with you, but the situation with the pandemic is so unique that not all past indicators can show the correct and most importantly the real picture of what is happening. When you print a lot of unsecured money, you will get inflation anyway. Another question is that in the current conditions, the tools of governments are not so extensive and the main task is to try to minimize the negative consequences later.

There can be a reverse argument as well. Rather than saying that high oil prices are causing inflation we can also claim that it is inflation that is responsible for the high oil prices. The governments around the world have sanctioned big spending measures, giving the excuse that they are needed to fight the pandemic. On the other hand, the inflation levels have remained low, partly because of the slowdown in bullion and real estate sectors. But the increase in crude prices is a good sign that the inflation rate is going up.

Until now, oil seems to play a major role in inflation. but indeed inflation seems unavoidable by a country, which occurs every year. especially with rising oil prices, inflation will certainly occur, on the other hand if the government prints money continuously it will encourage inflation as well. Therefore, by trying to keep prices stable, you will be able to control inflation

Sithara007

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Quote from: AndySt on July 12, 2021, 06:47:10 PM

You will also compare with negative oil prices and get a catastrophe in inflation in general Grin

Please let's not forget that oil prices are a separate, slightly non-market story, when prices collapse and rise several times and even go into the negative side, so I don't quite agree with oil prices as arguments about inflation. To some extent, I agree with you, but the situation with the pandemic is so unique that not all past indicators can show the correct and most importantly the real picture of what is happening. When you print a lot of unsecured money, you will get inflation anyway. Another question is that in the current conditions, the tools of governments are not so extensive and the main task is to try to minimize the negative consequences later.

There can be a reverse argument as well. Rather than saying that high oil prices are causing inflation we can also claim that it is inflation that is responsible for the high oil prices. The governments around the world have sanctioned big spending measures, giving the excuse that they are needed to fight the pandemic. On the other hand, the inflation levels have remained low, partly because of the slowdown in bullion and real estate sectors. But the increase in crude prices is a good sign that the inflation rate is going up.

AndySt

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Quote from: Vishnu.Reang on July 12, 2021, 02:52:36 PM

Quote from: horrifiedx1 on July 11, 2021, 08:27:08 AM

right, with the increase in oil prices, of course, the transportation sector will be the most affected, while everything related to the distribution of goods uses transportation, so this will trigger an increase in all prices. unless, for example, electrical energy that has been developed can replace it, so that it can replace the role of oil

Any increase in the crude oil prices will have far reaching impact, because it is being used in almost all the sectors - transportation, power generation, industries, heating (natural gas prices are also linked to crude oil prices), chemicals and plastic manufacturing, asphalt.etc. And if we check the prices for the last 12 months, it can be seen that the rate of brent crude has gone up from $40 per barrel to $75 per barrel. The prices have almost doubled. And from the historical perspective, the increase in crude oil prices is being regarded as one of the early signals of worsening inflation.

You will also compare with negative oil prices and get a catastrophe in inflation in general Grin

Please let's not forget that oil prices are a separate, slightly non-market story, when prices collapse and rise several times and even go into the negative side, so I don't quite agree with oil prices as arguments about inflation. To some extent, I agree with you, but the situation with the pandemic is so unique that not all past indicators can show the correct and most importantly the real picture of what is happening. When you print a lot of unsecured money, you will get inflation anyway. Another question is that in the current conditions, the tools of governments are not so extensive and the main task is to try to minimize the negative consequences later.

pinggoki

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Inflation is something that cannot be cured other than with good and competent governance. A lot of factors are in play when it comes to the purchasing power of your national currency that simply blaming it to the working class won't work. Proper allocation of funds plus ensuring that corruption is prevented usually solves the issue with inflation as in the case with countries where the government is doing its intended work. Otherwise we're really going to be the ones who will suffer at the end of the day.

Quote from: ChiBitCTy on June 18, 2021, 10:34:49 AM

Inflation certainly is a major issues right now that I believe the vast majority of people are not prepared for. Where I work, we currently offer a fixed account with a rate of 2.53%, which is VERY good for todays standards ( the best fixed rate you can get at a bank is currently around .5%). That being said, with inflation around 3%+ on average right now, technically you're losing money sitting in that account "earning" 2.53%. Here is a great article I just read about the Fed Reserve and skyrocketing interest rates- https://www.cnbc.com/2021/06/16/fed-holds-rates-steady-but-raises-inflation-expectations-sharply-and-makes-no-mention-of-taper.html

"Though the Fed raised its headline inflation expectation to 3.4%, a full percentage point higher than the March projection, the post-meeting statement stood by its position that inflation pressures are “transitory.” The raised expectations come amid the biggest rise in consumer prices in about 13 years".

That's the thing, even when you do means that "experts" say could help you earn and save money, if your country's currency is highly inflating or is inflating you really have little to no choice. So it's either you risk losing your money anyway by not saving it in a bank or you apply for a new job, because no sane man would ever think of their respective country finally getting their stuff together through protests and movements.

STT

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Stating it as risk would suggest a risk also of deflation occurring is there, we have a certainty of continual price rises because of excessive liquidity and failure in currency standards. The risk for deflation I'll state as a scenario but I don't think it happens, for deflation we'd require a reversal to QE and that cannot likely occur all that might be possible is default on debt and this equates to deflation.
Governments can and do go broke normally but not when they have any option to do otherwise, so what happens near term is quite predictable and its an excess of inflation. Ultimately this is destructive and I'd hope most people are able to shelter their family from its effects but the whole of society will suffer some loss, quite simply free money does not exist so you know losses are coming.

I'm not stating a controversial opinion here especially, Iam paraphrasing the Federal Reserves released minutes. This all is a deliberate policy and has been determined to be the most stable course to ensure against disorderly markets.

Vishnu.Reang

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Quote from: horrifiedx1 on July 11, 2021, 08:27:08 AM

right, with the increase in oil prices, of course, the transportation sector will be the most affected, while everything related to the distribution of goods uses transportation, so this will trigger an increase in all prices. unless, for example, electrical energy that has been developed can replace it, so that it can replace the role of oil

Any increase in the crude oil prices will have far reaching impact, because it is being used in almost all the sectors - transportation, power generation, industries, heating (natural gas prices are also linked to crude oil prices), chemicals and plastic manufacturing, asphalt.etc. And if we check the prices for the last 12 months, it can be seen that the rate of brent crude has gone up from $40 per barrel to $75 per barrel. The prices have almost doubled. And from the historical perspective, the increase in crude oil prices is being regarded as one of the early signals of worsening inflation.

Topic: Risk of Inflation in Economy. - page 2. (Read 1634 times)