Topic: Why Inflation is a big problem for a country? - page 3. (Read 549 times)

if the US prints money then there is no need to worry about inflation because the dollar is used for international trade but if other countries do it then inflation will definitely happen....so far, the US has printed money to pay its debts and circulated it to the public, but the dollar exchange rate against other countries' currencies remains strong. other countries find it difficult to follow the US' steps, so admitting bitcoin as a legal tender is the best thing El Salvador has done to prevent their country from experiencing inflation.

What is missing from the first paragraph of your argument, is that every time you repeat the word "money" it is an increasingly devalued thing. Governments have been in a forward flight since 1971, with a ball that keeps getting bigger and bigger, and an economy built on ever increasing debt that keeps growing.

They are now in a catch-22 situation: the economy is a junkie that needs the injection of central banks, but this injection causes inflation, which is getting higher and higher, which makes people poorer and poorer, no matter how much people earn (except in some cases where the wage increase can beat inflation).

If they stop injecting: economic growth falls.
If they keep on printing: more and more inflation.

They have a hard time.

If the Fed stopped printing money then economical growth will be stopped or we can say it will not be visible. We need to understand why they print more money every month. Govt print more money to increase the demand for products and services. More demands mean more work for the people which will reduce the unemployment rate. People will have money in their pocket so they will spend more money which will give govt more taxes and boost the economy.

But printing more money to pay the debt is a very bad idea which most of the govt does and that is the reason Inflation destroying the economy not boosting it.

US inflation and they think they are in the brink of destruction. No. That's just exaggerating things.
There are more countries with bigger problems than them. High inflation rates in third world countries and they won't stop printing more money or borrowing. Government will keep on doing this until everything goes well, or they think it is enough.
If it could provide more jobs for the people then it will equal the expensive rates in daily basis but people cannot manage to save. Inflation cannot be solved short-term, there must be a plan, it's not always that bad.

Inflation cannot be stopped unless the money supply is limited. Since governments are all the time printing money, this will devalue the currency and is the major factor for inflation.
In order put the inflation on halt, either the government strictly do not allow printing of currency notes (which they will hardly stop) or start using a inflation free currency like bitcoin (which is also very unlikely).

You need to know what is inflation to stop the inflation, and if you do then you won't be actually asking such questions.

People can't do anything about inflation and deflation its in the hands of the respective Central banks which comes under every country because they're the one who is printing money and deciding how much money printed every year, if you want the inflation rate to be zero the only possible solution is government should stop minting new money.

So all those media talking about the Inflation problem is total nonsense? I know Inflation is good in certain conditions like when we have a lot of unused resources and labor force then inflation can boost production. But too much inflation will slow down the economy because interest is high and peoples are more focused on savings, not spending. Less spending = fewer demands, fewer demands = less production, less production = less labor which causes the unemployment problem.

I do not think it's impossible to stop but we don't need to stop it on the other hand we don't need unnecessary inflation either.

...inflation occurs because the government circulates scam currency to their citizens

...if they rely on bitcoin then inflation will run away

...the concept of a happy life is simple, exchange your country's currency for Bitcoin

Inflation is not really a big problem, inflation beyond target is. And it is not that there is no way to stop it, because economies desire it in the first place. So it is not a question of whether it is impossible to stop inflation or not as there is actually no attempt to stop it. In the current economic system, inflation is indeed an integral part. Inflation incentivizes a lot of things. Wages increase, loan value decreases, consumption increases, and so on. So prices of goods and services have to increase, albeit moderately.

Inflation is a big problem! It destroyed few countries in the past and will destroy more in the future. When inflation goes out of control, the price of the goods sky rockets. The general living cost increases, but the purchasing power of the people stays the same or goes down. Hence people can't afford anything while their currency becomes worthless.It is possible to stop inflation and reverse it. It is called deflation. And the government does try to take different monetary and fiscal policies to stop it.

Inflation can be stopped if the government can stop printing fiat out of thin air, the more they print the more circulation will be and it make fiat more worthless. As long as it's scarce and high demand, obviously it wouldn't got inflated. We as people has no way to stop inflation, we only can hope government to stop printing money over and over.

If the stuff's price is still fixed using USD/fiat currency and not in satoshi, I believe it wouldn't stop inflation as the price aren't mainly from Bitcoin but their fiat. I don't think there's a country will only accept Bitcoin as their main legal tender, they'll only accept as alternative.

Government can eliminate or stop inflation from the country because they has the power to control everything in the country include fiat money and economy. Inflation is not inevitable to government or people because the government has what it takes to remove high rate of inflation down to low rate of deflation in the country, so that every citizens will feel the impact of deflation in the community

Government can legalized bitcoin in every part of the country to stop inflation by creating decentralized institution for people to learn more about decentralized currency in the country. Government can make it possible for every citizens to be educated about bitcoin and how to use it to create more opportunities that will reduce inflation totally from the country.

In my opinion, stopping inflation is very impossible that can be done just to pressure it not too high, actually inflation can also be used as an economic indicator, for example prices rise because the high demand, a lot of demand this happens because the economy of society is increasing but the production of goods has not been able to meet the demand so that prices become rising, as long as there is no hyperinflation all good, all countries will definitely experience it and will not be able to make it into zero inflation.

It's not that it's impossible, it's that they don't, and for good reasons. Completely stopping inflation would hurt the economy, and a balance must be maintained for it to actually benefit the economy. Now, what damages the current state right now is that inflation is rising at high levels. Levels that are not beneficial for the economy of the country. It's to the point that people are losing their purchasing power when they aren't even doing anything with it.

Rather than stopping inflation, a more apt term would probably be controlling it?

Inflation is always and everywhere a monetary phenomenon. — Milton Friedman, 1963

The Federal Reserve created USD inflation, and it can end it.

In 1979, the USD inflation rate was about 9%. In October, Federal Reserve Chairman Paul Volcker announced plans to end inflation by taking actions that caused interest rates to rise to extremely high levels. The inflation rate peaked at about 11% shortly after, but then dropped to 6% in 2 years and 4% after 3 years. It continued to drop to the relatively low levels we have been seeing for the last few decades.

Another effect of the rise in interest rates was a short but severe recession. The economic pain caused a huge political backlash, and it was probably why President Jimmy Carter was not re-elected (even though he should receive some of the credit for the decades of economic expansion that followed).

Now we are facing the same situation. It remains to be seen if Biden will risk a second term to combat inflation, and if Powell has the balls to end inflation like Volcker did.

Note: if inflation were measured now as it was in 1979, it would be far higher than 9%.

Also note: This recession is the source of the term "Generation X" because the generation becoming adults at the time were expected to never recover economically.

It can't be avoided but it can be delayed. I've seen that Japan did delayed the inflation.

Yes it's inevitable and given that there's already the inflation. As someone who's going to be hit by it badly, we need to do something like hedging against it through our investments. Making more source of income to cope up with the continuous price increase of almost everything. That's what we can do to at least deal with it.

Very important question that I haven't seen anyone able to answer it so far. This should be being discussed at television news' channels, political campaigns and on the daily life.

We need more knowledge and informations to find an useful solution for inflation. But personally, I think if governments stopped printing money and raising public employees' wages and also minimum national wages, inflation should increase slower, at least.

Individuals can protect themselves from inflation by buying some investments such as bitcoin and gold, and other such assets that are somewhat protected to it. We, as individuals, cannot stop inflation, and the governments are the ones who can change it. Then again, they most probably wouldn't do it as they can lose profit by not printing more money. It's a double-edged sword that, if left unchecked, is very dangerous to a country's economy, as we can see in Venezuela right now.

With the rising inflation that most of the countries are experiencing today, i see the chance to control this is very slim. And unfortunately, this will make the poor people become poorer seeing the prices continue to surge particularly for basic goods which means their money will be less valuable so it will reduce too the value of a currency's purchasing power. So making investments this time more particularly like bitcoin will protect us from inflation. Although this may not be the best option but it can be a great help not to put ourselves suffering from the peak of poverty.

Inflation is similar to the Great Depression. Incidence of similar events are separated by a vast enough timeframe. That by the time conditions ripen for a period of high inflation or depression to occur. People have forgotten details of the previous crisis.

There is a trend in society, where many appear to believe they're better off not knowing details or basic mechanics of inflation. Which makes them powerless to do anything to address it. Power is knowledge and both are usually insufficient to countering trends like inflation.

Steps people can take towards reducing probability of inflation include basic steps like reducing reliance on government and making greater effort to be informed and aware. To fix inflation, we must first comprehend inflation. Everyone wants inflation to end. Yet few will become informed enough to support the right policies to address inflation.