On the Horizon

WHAT DOES INFLATION MEAN? 

Inflation is the decline of purchasing power of a given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of a basket of selected goods and services in an economy over some period of time.

WHAT CAUSES INFLATION?
Inflation is a measure of the rate of rising prices of goods and services in an economy. Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages. A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product.

IS INFLATION GOOD OR BAD?
Inflation erodes purchasing power or how much of something can be purchased with currency. Because inflation erodes the value of cash, it encourages consumers to spend and stock up on items that are slower to lose value. It lowers the cost of borrowing and reduces unemployment.

For the most part, inflation is not good unless wages increase proportionately...  but, if that happens, then economics say that there is no inflation...  just a steady economic growth which is a win/win situation for everyone.

But, if prices increase and wages do not, then people pay more for the goods and services they have to have and do not partake in the goods and services that they do not really need...  This causes the economy not to grow.

From my perspective as a retired individual, I don't give a rat's ass if the economy grows or not as long as prices do not increase...  And, yes that is a selfish point-of-view but I would suspect most people do not want prices to go up and if anyone wants their taxes to go up needs to take their head out of their ass or purchase an inflated price glass bellybutton so that they can see better.