Topic: Why Inflation is a big problem for a country? - page 4. (Read 593 times)

As long as this covid 19 crisis will never stop, expect that the high rate of unemployment will continue to increase, leaving most of the people experience the state of poverty. But i don't think the government is not aware of it, and they are just not doing something to control it. The government will always consider the welfare of the people, but this inflation is starting to be in a state of out of control. And if its stays in that state for long, hyperinflation will occur as it will create continuous price surging for basic commodities. This is the reason why some countries think to shift into bitcoin knowing fiat is already highly inflated.

Probably you are from US and recent inflationary is the reason your created this thread, but know that US is far better than many other countries, you can use this classification to know the extent of inflation in a country.

Developed countries, less inflation
Developing countries and, more inflation
Underdeveloped countries, most inflation

US is still part of most developed countries, even US is still the number 1. Covid-19 affected all countries, while the money printing might contribute to this.

Yes, it is very possible, but the economy will be worse if the local currency is not devalued. The government regulate local currency price to prevent their foreign reserves. For example, if a country is more depending on export, the government will reduce the purchasing power of their local currency just to reduce the depletion of foreign reserves. So, inflation is also necessary and if not imposed by the government at the appropriate time, it can make the economy worse.

Not possible, that is what fiat is for, this is the important aspect of fiat why government rely on it, for control and inflation purpose.

How about this also, for example, like a country that almost soly rely on crude oil like Nigeria, if the federal government want to be able to pay workers salary, they will sell crude oil, have the amount, devalue their local currency so they will be able to pay workers whereas, the purchasing power has also reduced, just an example. The government will have the money already but devalue it before paying workers.

Government always does what they can do to reduce the inflation all the time. Thing is they always have to clear many things around the circle of national scope. We can not really blame they as to why are they not working on it; actually they are working but they have to face big deals of nation and its emergencies. Since they dont have single thing to do they would be exploring many many ways.

Inflation surely can be stopped but it takes outstanding planning. The root cause of the inflation needs to be identified first and then major steps start to pull off. For example, in the current situation USA failed in pandemic. The health care systems and strict rules of COVID protection made the situation worst throughout the nation. This led to poor employment circle, reduced job quality and thus money flow stopped.

Heavy stimulus packages were distributed on various instances and this made the central banks to print more money. So free money was getting paid out and thus inflation started coming out.

US need, big fix on businesses, employment and health care systems. Unless and until they do not come online, its gonna be another bad day for them.

Inflation is bad for low income earners and the artisan because they hardly have enough to feed, the little to feed with is being inflated leaving them on hardship. The government don't really have anything to lose as they benefit from budget and project from bribes that they don't depend on salary they get. It is really hard times in the world and majority of the people are on the poverty line. What makes the situation worse is that unemployment is rising daily.

Governments make money from inflation. Inflation is good for governments.
They print money, use it, and only then (after their spending) inflation occurs. So we lose money after the government spend it.

It is somehow a different form of tax.


It can do, but it is not popular.

Government like to raise salaries, spend money to make economy grow.

When government build roads, hospitals, etc jobs are generated, many people make money, etc, and inflation helps gonverment make these things happen.

Individuals can protect themselves buying gold, bitcoin, stocks..

Inflation applies to all countries which is indeed the only threat that will destroy their economy. Not only that. Unresolved inflation will gradually undermine all sectors, not only the economy, but will also cause a social crisis among the people that cannot be controlled. Demands for the country's leaders will stick out and become a very big demonstration. Defined as a form of government failure in managing the economy. It could even lead to a coup carried out by the people to overthrow the government.

There is no way to stop inflation. It can be managed to a certain extent only! Based on the size of economies, 2% - 4% inflation is expected  but when goes beyond that limit, that becomes a problem.

The only widely known method to manage inflation is to increase the interest rate. This way, the excess money can be sucked out of economy so that people b3come cautious and don't spend more. The affects the demand and thus the production. However, if the government has take debt from their countrymen through various bonds and savings certificates, increasing interest rate can bring more concern.

Inflation is going to increase the prices of goods and services but at the end for people to be able to afford all of that they must have better jobs and more salary as well which is not a direct result of inflation. Generally the salary takes a while and therefore at the end of the day they would have to use the same salary for much higher rates causing poverty and other problems as well. Especially when you are talking about the US their healthcare costs are sky rocketing and there is nothing that one can do about it. Therefore people won't be able to afford anything for the time being and then is the problem of people being treated improperly at their jobs causing them to resign .

We all know that Inflation in the US economy is at an alarming rate. Not the only USA, but Inflation is also a big problem for many countries globally, and it seems there is no way to stop it. Is it impossible to stop inflation in fiat currency or govt don't want to take any action it stop it? Do you think people can do anything to stop inflation in their economy or its inevitable?