Typically inflation and higher prices are considered bad, but can they be good for the economy? Inflation is one of the oldest concepts in economic theory, but experts still struggle to decipher its actual role in the market. It is often seen as a financial plague, which can ruin entire nations if it gets out of control. Price inflation means that prices have increased in the economy, usually due to monetary inflation, i.e., an increase in the money supply. Some of the most inglorious examples of hyperinflation are Germany in 1923, Greece in 1944, Hungary in 1946, Zimbabwe in 2008, and surprisingly the U.S. Confederacy during the Civil War. But proponents of inflation say it is not … [Read more...]
December 2021 Inflation 5 Times as High as Last December
The Bureau of Labor Statistics reported Record High Annual Inflation Rate in December. Inflation Summary: Annual Inflation highest since June 1982. CPI Index rose from 277.948 to 278.802. Monthly Inflation for December was 0.31% The next release is on February 10th Annual Inflation for the 12 months ending in December was 7.04%. 2021 Inflation Rates Nov. 6.81% -- Oct. 6.22% -- Sept. 5.39% -- Aug. 5.25% -- July 5.37% -- June 5.39% -- January 1.40% Inflation in December 2020 was just 1.36%, but by December 2021, Inflation had multiplied over five times in a single year to 7.04%. As you can see from the chart below, current levels have exceeded the July 2008 peak of … [Read more...]
Soaring Inflation Can Skyrocket Your Insurance Costs
Recent events including the pandemic were, in many ways, defined by categorical health concerns, followed by government-triggered economic uncertainty and ultimately rising inflation. This unique event in world history has triggered economic ramifications, including a potential hike in insurance rates brought about by accelerated overall inflation. Today we’ll look at just the insurance component of overall inflation, although food and energy are more significant factors in the inflation calculation. It may be distressing to say, but insurance costs must keep up with the rate of inflation if their policies are to remain economically sustainable by the company. After all, there is nothing … [Read more...]
How Nixon’s Revolutionary Move Influenced U.S. Inflation For 50 Years
Nixon is not remembered well by history because of the single defining moment of Watergate and the high inflation rate during his Presidency. However, according to a 2017 C-SPAN Presidential Historians Survey, Nixon actually ranked 10th among all presidents for his foreign policy. And the Siena College Research Institute, Presidential Expert Poll of 2010 ranked him 11th on foreign policy accomplishments. Of the 21 different categories, this survey ranked Nixon an average of 27.6th out of 44 presidents... so only slightly worse than average. Nixon’s China Visit One of Nixon’s foreign policy actions was to open diplomatic relations with China. This one action would have long-lasting … [Read more...]
U.S. Inflation is Not the Only One Increasing
It is not just U.S. inflation that is surging. Other countries have followed the U.S. lead and pumped massive liquidity into their economies. For instance, Brazil had double-digit inflation, Mexico had 6.24% inflation, and South Africa had 5% inflation. Brazil: In October Brazil announced that it had broken the double-digit inflation mark at 10.25%. The last time this happened was in 2016. In November they announced that as of October annual inflation was up slightly more to 10.67% with monthly inflation of 1.16%. In addition, Brazil is suffering from 14.1% unemployment resulting in a Misery Index of 24.77%. Currently, the U.S. Misery Index is less than half that at 10.82%. UK Inflation … [Read more...]
Inflation: The New Normal?
After decades of low inflation and even fears of deflation, inflation concerns are once again dominating the headlines in the contemporary financial media. As the global economy grappled with the fallout of the coronavirus pandemic, major central banks embarked on an unprecedented monetary easing program. This was an attempt to shore up the flagging economic growth by increasing the money supply. This resulted in the shortest recession in economic history but also created problems of its own. With widespread shortages spooking consumers and investors alike, central banks are now having to contend with persistent supply chain disruptions, decaying consumer confidence, and the looming … [Read more...]
How Insidious Inflation Affects the Affordability of Tuition and Fees
While the pandemic began to alter the way we live in 2020, its ripple effect on the economy has continued the devastation. Initially, people were not spending as much as they would have if they didn’t have to remain at home. Once the government relaxed the restrictions in November 2020, people began traveling and satisfying their pent-up demand. This surge in spending overwhelmed the limited supply, which caused short-term inflation (when demand exceeds supply, prices go up). Several other factors have affected inflation since then, and households have been reeling due to the hikes in the prices of everyday items. However, hardly anyone talks about the effect of inflation on American … [Read more...]
9 Inflation Books You Must Read
For the average person, deflation, inflation, and even hyperinflation may seem quite murky or mysterious. However, it's actually a lot easier than you'd think. With the right books, the idea of inflation can be broken down for you, and you can start to understand how monetary inflation works. You might also like: How the FED Controls the Money Supply Money Multiplier Velocity of Money Agflation- What is it? Inflation and Velocity of Money What is the Real Definition of Inflation? Here are 9 books that you have to check out if you want to understand more about inflation. 1) Inflation Matters by Pete Comley Inflation Matters is a truly comprehensive book … [Read more...]
Hyperinflation Strikes Lebanon… Again
Lebanon's economy is crashing and burning... literally. Fiery protests began in August 2019, in the wake of youth unemployment reaching 37% and the general unemployment at 25%. This was even before the entire world shut down due to COVID. And this was just the beginning of hyperinflation for Lebanon. In 2019 Lebanon's inflation rate averaged a reasonable 2.9% for the entire year, but by July 2020 Lebanese inflation was well into hyperinflationary territory at 112.39%. So prices were moving up so fast they had more than doubled from July 2019 through July 2020. And from there it got worse. From August 2019 through August 2020 prices were up over 120%. And remember that the average for 2019 … [Read more...]
The Relationship Between Inflation and Interest Rates: Explained
"Macroeconomics" deals with the "big picture" of how things fit together in the economy as a whole, while "microeconomics" deals more with how it affects the individual. Here at InflationData, we generally look at the macro side and leave the economics of the individual to our sister sites like Your Family Finances. Today we are going to look at the macroeconomic implications of the link between inflation and Interest rates. ~Tim McMahon, editor The Macroeconomic Link Between Inflation and Interest Rates By George J. Newton Price Inflation is the rate at which the price of goods and services rises in the economy over a period of time. Monetary inflation is the increase in the money … [Read more...]
