Tradefair & Financials
Welcome to Live View – Take the tour to learn more
Start Tour
There is currently 1 person viewing this thread.
Can someone explain to a simpleton what it is and how it works/affects us on a day to day basis. Please.......
Show More
inflation is an increase in the amount of money around. years ago there wasnt any inflation so u could just keep yr savings under the bed. now u have to invest yr savings and put them at risk so they arent devalued by inflation.
all goods costs increase in manufacture ...so price increase =inflation.
Spykes - do you by any chance live at either No 10 or 11 Downing Street?
by the way inflation dosent anything to do with how much money around........if you earn a million ..no one takes it from ...
by the way inflation dosent anything to do with how much money around
haha try telling that to the people in Zimbabwe!
Rising prices are not inflation but a result of inflation. Inflation therefor in a broad sense is an expansion in the money supply or the money in cirulation.
ie if everyone that walked into a market was given 10k as they entered on the condition that it had to be spent there what do u think would happen to the price of the goods you purchased?
haha try telling that to the people in Zimbabwe!
Rising prices are not inflation but a result of inflation. Inflation therefor in a broad sense is an expansion in the money supply or the money in cirulation.
ie if everyone that walked into a market was given 10k as they entered on the condition that it had to be spent there what do u think would happen to the price of the goods you purchased?
Inflaytion?
http://www.youtube.com/watch?v=KJh0pDMnL8M
http://www.youtube.com/watch?v=KJh0pDMnL8M
gatespeed
Of course they are related but that is not the definition of price inflation which i presume he is referring to.
If everyone gets given 10k but they all have 10k of debts or want to save for the future then the prices won't change - or at least not in a directly proportional way. Price inflation is clearly the general increase in prices - can be caused by increased money supply but not defined as that increase in supply.
Of course they are related but that is not the definition of price inflation which i presume he is referring to.
If everyone gets given 10k but they all have 10k of debts or want to save for the future then the prices won't change - or at least not in a directly proportional way. Price inflation is clearly the general increase in prices - can be caused by increased money supply but not defined as that increase in supply.
Monkfish, depending on why you called yourself that, you might find the link I put up amusing.
Spykes
Inflation is the lubricant when those who have want to bend over and shaft those who haven't.
As a previous poster says some people take the view that it is a case of an increase in money supply in an economy which results in more money chasing the same amount of goods. When that happens the money is devalued and the goods become worth more of that devalued currency.
Although it may seem a strong thing to say inflation is a form of theft. It works in the interests of those with power and against the poor and those who try to put something by for a rainy day.
Hopefully an extreme example may illustrate the problem:
Imagine as sometimes happens in failing states that the official inflation rate goes bananas. You could be in a situation where prices are doubling within a very short period of time. So imagine that you go into work on Monday morning. At that time you know that your wage for that day will buy you a loaf of bread. By the end of your shift you get your wage for that day and go to the bakery for your loaf of bread. Unfortunately for you the price of that loaf of bread has doubled. Consequently your days worked was actually halved in value even though you gave a full days work. In effect the boss has paid you for half a days work.
Of course that is an extreme example but it has happened (Weimar Germany - ever wondered why the Germans are obsessed with inflation?). However, what it does is illustrate a general point.
Similarly with our government owing vast amounts of money it is in their interests to create inflation. They can do this in more than one way but be under no illusion that they can do it.
That is why if you listen to people like chisel who tell you that we are going to suffer from deflation then run a mile from them. People like that haven't got a clue what they are talking about.
Inflation is the lubricant when those who have want to bend over and shaft those who haven't.
As a previous poster says some people take the view that it is a case of an increase in money supply in an economy which results in more money chasing the same amount of goods. When that happens the money is devalued and the goods become worth more of that devalued currency.
Although it may seem a strong thing to say inflation is a form of theft. It works in the interests of those with power and against the poor and those who try to put something by for a rainy day.
Hopefully an extreme example may illustrate the problem:
Imagine as sometimes happens in failing states that the official inflation rate goes bananas. You could be in a situation where prices are doubling within a very short period of time. So imagine that you go into work on Monday morning. At that time you know that your wage for that day will buy you a loaf of bread. By the end of your shift you get your wage for that day and go to the bakery for your loaf of bread. Unfortunately for you the price of that loaf of bread has doubled. Consequently your days worked was actually halved in value even though you gave a full days work. In effect the boss has paid you for half a days work.
Of course that is an extreme example but it has happened (Weimar Germany - ever wondered why the Germans are obsessed with inflation?). However, what it does is illustrate a general point.
Similarly with our government owing vast amounts of money it is in their interests to create inflation. They can do this in more than one way but be under no illusion that they can do it.
That is why if you listen to people like chisel who tell you that we are going to suffer from deflation then run a mile from them. People like that haven't got a clue what they are talking about.
Nice one History Maker - that is exactly where my name came from haha
If you are in debt inflation is great.
If some one owes you money or you have made a little investment at low interst rates. Not so good.
Mortgaged up to the hilt. Pray for infaltion. Worked your @ss off all your life to put a little away for your retirement. Tough luck sucker.
The government can inflate debt away and buy off the recession with low interst rates.
Or it can raise interest and stop infaltion and its" oh yeah so there is a recesssion afterall."
But it cannot do both.
If some one owes you money or you have made a little investment at low interst rates. Not so good.
Mortgaged up to the hilt. Pray for infaltion. Worked your @ss off all your life to put a little away for your retirement. Tough luck sucker.
The government can inflate debt away and buy off the recession with low interst rates.
Or it can raise interest and stop infaltion and its" oh yeah so there is a recesssion afterall."
But it cannot do both.
please- why this hysteria about inflation? The only thing rising in price is government charges/tax etc.Price inflation due to demand or money supply is non existant Its talked about ad nauseaum but barly moves.Maybe it gets to 5%. Zimbabwe it ain't.
Post Your Reply
Please login to post a reply.
Wonder
Instance ID: 13539