Why Inflation is a big problem for a country?

[Darker45]

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.

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.

I'm not saying inflation talks are a total nonsense. The media talking about inflation is not nonsense. But the game of inflation is not its presence or absence, because whether we like it or not, inflation has to stay. The discussion on inflation is not on inflation per se but on its level. It's not about wiping out or preserving inflation. It is simply about keeping inflation within tolerable levels. Too high inflation is as bad as too low inflation.

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.

The after effect of inflation is not generally good for the people. How moderate can things increase when the value of money in the pocket can not measure up to get what is in need.. The rising inflation rate doesn't help because it is creating hardship more to the society. It is not controlled and the government not taking good step.

As I've said, if inflation is kept within target, it must be good rather than bad. However, if inflation is rising beyond the maximum tolerable level, it is definitely bad. If the government fails to tame it down, it must be worse.

[jhonjhon]

Inflation is an increase in the supply of money circulation. In general,increase in price is a symptom of inflation.

Inflation is good if you're in debt or an investor but it is a big problem for people who had only enough income to provide their necessities. In other words, inflation makes rich people richer and poor people makes poorer.

Inflation is also bad for saving. If you kept your life on saving without making any action, you'de be wipeout in a day or two.Thats why you have to make a plan for the future.

Is it impossible to stop inflation in fiat currency or govt don't want to take any action it stop it?

I dont think so.Government doesnt care about inflation, they just care about making money..

[doomloop]

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.

Don’t  know about that, but inflation has destroyed a lot of economies around the world, take Venezuela as an example. So, I can’t really see how inflation would be regarded a good thing, although I do understand that there is always something good about everything that happens, but some things are way too bad that they cause more harm than good and inflation is one thing that I see as such.
 
In the country where I am living, things has gotten quite bad , lots of things in the market you can’t even afford to pay for them and it’s all because of inflation. You’d see products you used before, and now they will not only get costly, but the quality and the quantity will be reduced as well.

[Webetcoins]

Is it possible for people to do something to stop inflation? Maybe with a collected effort of citizens in the country it might be possible to go about stopping inflation, but not as an individual, because you as an individual wouldn’t have what it takes to stop inflation in your country.

Even if it is something you would like to do, because it worries you, do you think that other citizens also have the same interest or that this problem of inflation bothers them as well? The answer is no.

Although it is normal that everyone would complain how the price of things are getting costly, but how many of them are doing to something about it? Then you talk about the government, who are the ones that has as much power that it takes to stop inflation, are they really doing anything about it? The answer is NO.

[justdimin]

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?

I believe that we had many years when the world economy did alright, between around 2011 to 2016 it was as stable as it gets as far as I can remember, also between 2001/2002 to 2008 crisis it was still relatively ok as well. These are things that I am making out of my mind right now, I do not clearly remember or even checked the data for it but it wasn't THIS bad for sure.

Between nations handling covid horribly and energy crisis and pandemic causing productions to halt and many other things, profits are not too low for major companies but people are not seeing most of it hence why the world is doing worse. All in all, inflation could be fine as long as it is under %2 but we have been over that for a while now.

[Botnake]

Until now, the government has only tried to suppress the rate of inflation every year, and it seems there is no way to avoid inflation which is getting higher and higher. this becomes difficult for a poor country that wants to get out of its zone. although crypto offers anti-inflation, it is irrelevant for now. maybe later

There are really a lot of ways that a government can control or fight inflation. But putting an end to it may not be as easy as it is and that is why most of the countries today are still suffering from the inevitable inflation rate even though each country is also doing their best to control the inflation.  But there are ways really on how a government can reduce inflation. Here's the link: https://www.investopedia.com/ask/answers/111314/what-methods-can-government-use-control-inflation.asp

[Darker45]

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.

Don’t  know about that, but inflation has destroyed a lot of economies around the world, take Venezuela as an example. So, I can’t really see how inflation would be regarded a good thing, although I do understand that there is always something good about everything that happens, but some things are way too bad that they cause more harm than good and inflation is one thing that I see as such.
 
In the country where I am living, things has gotten quite bad , lots of things in the market you can’t even afford to pay for them and it’s all because of inflation. You’d see products you used before, and now they will not only get costly, but the quality and the quantity will be reduced as well.

I'm now a broken record here. Inflation hasn't destroyed economies, too high inflation did. Although there are more or less a handful of countries across the world that have negative inflation, the rest have positive inflation. Even those countries that have negative inflation did not prefer it that way. They simply failed to hit their target inflation.

If inflation destroys an economy, each country today should have already crumbled. If inflation causes more harm than good, no country, instead of all, should have set a certain inflation level.

Without inflation, everything will fall. Deflation happens.

[Ultegra134]

Depends on how much inflation we're talking about, let's keep in mind that 1-2% rise is deemed healthy for the economy. On the other hand, the opposite of inflation, deflation deemed as catastrophic. Certainly, inflation has skyrocketed the last few months, rising 4-5% in average if I'm not mistaken (for European countries at least, it's about 5% in Greece), leading to price increases in most if not all goods available.

On top of that, electricity and fuels aren't included in that index, thus, the financial burden on the consumer is way higher.

Have I seen a difference in prices the last few months? Definitely, supermarket costs more, while I'm starting to notice price changes day by day. Don't get me started on fuel, a liter of unleaded 95 costs €1,90, which is something I haven't seen before myself (it also happened back in 2012 if I remember correctly).

[ivankoh]

For example, if the salary for the job you take on increases 2%/year when inflation increases 5%/year.  Your standard of living and expenses go down.  It is an inflationary scenario that causes poverty… As a result the economy stagnates severely, Venezuela is a painful sight of “Inflation”

[romero121]

Inflation in simple term what we saved today becomes less valuable by tomorrow. This happens out of different reasons. Inflation can be easily understood when there is increase in the goods and services cost, particularly the basic needed things. The beneficiaries out of the inflation is the huge industries that charge additional amount for same products.

There won't be circulation of money. More currencies will be printed to make the situation normal. At some point there'll be increased production, and there won't be end consumers. Inflation can be kept under control by the governments economic development team, but majority fails in it.

[DrBeer]

First, we need to divide inflation into several types:
1. Negative
2. Zero
3. Moderate
4. High
5. Galloping
And accept one simple thought - inflation is a concomitant process of any monetary system!
Is inflation good or bad? The question seems to be simple, but very ambiguous. It seems that when there is no inflation, it is good, but then there are processes of "freezing" large sums of money in deposits. Is that bad. With moderate - yes, there is a process of "cheapening" money, but mechanisms appear that force this money to be used for its intended purpose until it has depreciated - to buy goods and services, to invest - this is useful for the economy.
High inflation, and even more so galloping, is very bad, such inflation really kills the economy and drives the population into poverty.

[Japinat]

Is it possible for people to do something to stop inflation? Maybe with a collected effort of citizens in the country it might be possible to go about stopping inflation, but not as an individual, because you as an individual wouldn’t have what it takes to stop inflation in your country.

Even if it is something you would like to do, because it worries you, do you think that other citizens also have the same interest or that this problem of inflation bothers them as well? The answer is no.

Although it is normal that everyone would complain how the price of things are getting costly, but how many of them are doing to something about it? Then you talk about the government, who are the ones that has as much power that it takes to stop inflation, are they really doing anything about it? The answer is NO.

I guess everyone is affected by the inflation, even the government officials that are being highly paid. So i cannot attest to that the government is not doing an action, of course they are doing it but most of them did not succeed. And for some reasons, once there is already an inflation, it will be hard to stop that but it can somehow be reduced. Here are some methods on how to control inflation. Source: https://www.economicshelp.org/blog/2269/economics/ways-to-reduce-inflation/

[Gyfts]

Inflation isn't actually a problem, we just accept it to be a problem because wages growth doesn't coincide with inflation. Granted, it's unreasonable for wage growth to keep up with inflation if it's something like 5 percent; if the banks target inflation at 2 percent and actually manage to keep it there, there wouldn't be any talks about inflation because most people in a working economy can garner a 2 percent wage increase year over year.

Issue right now is most countries shut down their economies for COVID while increasing the money supply, so the economic growth was not able to keep up with disproportionate amount of money that was being spent. Wage growth might've gone up by 2-3 percent if you're lucky, but inflation could've been at 5 percent plus, meaning you have less purchasing power.

[Maidak]

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?

I believe that we had many years when the world economy did alright, between around 2011 to 2016 it was as stable as it gets as far as I can remember, also between 2001/2002 to 2008 crisis it was still relatively ok as well. These are things that I am making out of my mind right now, I do not clearly remember or even checked the data for it but it wasn't THIS bad for sure.

Between nations handling covid horribly and energy crisis and pandemic causing productions to halt and many other things, profits are not too low for major companies but people are not seeing most of it hence why the world is doing worse. All in all, inflation could be fine as long as it is under %2 but we have been over that for a while now.

The rate of inflation is now alarming. Inflation is rising worldwide at such a rate that even countries like the United States are facing it.

Although inflation has not been such a big issue in some countries in recent years, but you can check the data of low per capita income countries. Inflation is nothing new there. Not everyone is suffering from the problem of inflation. Many are also taking advantage of it, so the profits of the major companies are not low. People are very stranger creatures, they do not think about the problems of the country or others. whatever the situation, they want to achieve their own interests.

[freedomgo]

Inflation isn't actually a problem, we just accept it to be a problem because wages growth doesn't coincide with inflation. Granted, it's unreasonable for wage growth to keep up with inflation if it's something like 5 percent; if the banks target inflation at 2 percent and actually manage to keep it there, there wouldn't be any talks about inflation because most people in a working economy can garner a 2 percent wage increase year over year.

Issue right now is most countries shut down their economies for COVID while increasing the money supply, so the economic growth was not able to keep up with disproportionate amount of money that was being spent. Wage growth might've gone up by 2-3 percent if you're lucky, but inflation could've been at 5 percent plus, meaning you have less purchasing power.

Well said. Inflation may not be a big issue on regular people if there are also seen increased in the wages on the minimum earners. Even if this fast rising inflation continue to increase, as well as the wages of the people too, there will still be high purchasing power just like before inflation has started. But as most of the countries have failed to control inflation, so we should just accept the fact that saving more this time and investing into crypto may protect us from inflation, as crypto has always been showing deflation.

[gantez]

Inflation isn't actually a problem, we just accept it to be a problem because wages growth doesn't coincide with inflation. Granted, it's unreasonable for wage growth to keep up with inflation if it's something like 5 percent; if the banks target inflation at 2 percent and actually manage to keep it there, there wouldn't be any talks about inflation because most people in a working economy can garner a 2 percent wage increase year over year.

If the government keep increasing salaries and wages to meeting up with the level of inflation so that the people won't feel the negative impact of cost of living, things, products and services will keep rising and to a higher level where it will become hyperinflation and nothing will be of value, it is not good to keep increasing salaries and it is worthless to use it to purchase goods as the value will reduce.

Issue right now is most countries shut down their economies for COVID while increasing the money supply, so the economic growth was not able to keep up with disproportionate amount of money that was being spent. Wage growth might've gone up by 2-3 percent if you're lucky, but inflation could've been at 5 percent plus, meaning you have less purchasing power.

You are right but printing of money is not the real course of inflation because they were used for buying things to distribute to people but the challenge why it push up inflation because capital project were abandoned and circulation of money increased.locked with people.

[Taskford]

Inflation isn't actually a problem, we just accept it to be a problem because wages growth doesn't coincide with inflation. Granted, it's unreasonable for wage growth to keep up with inflation if it's something like 5 percent; if the banks target inflation at 2 percent and actually manage to keep it there, there wouldn't be any talks about inflation because most people in a working economy can garner a 2 percent wage increase year over year.

Issue right now is most countries shut down their economies for COVID while increasing the money supply, so the economic growth was not able to keep up with disproportionate amount of money that was being spent. Wage growth might've gone up by 2-3 percent if you're lucky, but inflation could've been at 5 percent plus, meaning you have less purchasing power.

Well said. Inflation may not be a big issue on regular people if there are also seen increased in the wages on the minimum earners. Even if this fast rising inflation continue to increase, as well as the wages of the people too, there will still be high purchasing power just like before inflation has started. But as most of the countries have failed to control inflation, so we should just accept the fact that saving more this time and investing into crypto may protect us from inflation, as crypto has always been showing deflation.

Unfortunately the inflation is more faster to come than salary increase since government is so slow regarding on handling this issue but for us to avoid any of this things maybe its best for us not to let our money sleep in the bank since for sure we will badly hit by inflation since as you said the purchasing power will not be the same when we first deposit our money their so best we should put our funds on something that can generate us money since this could save us from inflation.

[Hispo]

As Venezuelan, I have seen how inflation can literally destroy people's lifes.
Thankfully is slowing-down lately.

I believe one of the things necessary for inflation control is a serious and pragmatic macro-economical plan carried by one's country central bank which is independent of the extreme political ideals of the ruling party. One of the biggest mistakes commited here was giving more valuble to economic theory than long-proved economical actions which work, just for the sake of whatever the president and the party wished to implement.

The well-being of people must be above social/economical experiments, specially if one's trying to face such a serious problem as inflation.

[n0ne]

As Venezuelan, I have seen how inflation can literally destroy people's lifes.
Thankfully is slowing-down lately.

I believe one of the things necessary for inflation control is a serious and pragmatic macro-economical plan carried by one's country central bank which is independent of the extreme political ideals of the ruling party. One of the biggest mistakes commited here was giving more valuble to economic theory than long-proved economical actions which work, just for the sake of whatever the president and the party wished to implement.

The well-being of people must be above social/economical experiments, specially if one's trying to face such a serious problem as inflation.

Venezuelans have known well about inflation, being a Venezuelan what is said above is the truth. Compared to the previous years Venezuelans seems to recover slowly through the adoption of cryptocurrencies, making use of play to earn tokens and exploring all available possibilities on cryptocurrency. I read about people in Venezuela having cryptocurrency as a common means, even the technology wise lacking people have begun to make use of it through Binance pay and other similar payment gateways. Being the 7th largest population for cryptocurrency adoption the growth will happen soon out of cryptocurrency. The inflation is mostly out of the ruling government who doesn't care for its people rather a specific group.

[Hispo]

As Venezuelan, I have seen how inflation can literally destroy people's lifes.
Thankfully is slowing-down lately.

I believe one of the things necessary for inflation control is a serious and pragmatic macro-economical plan carried by one's country central bank which is independent of the extreme political ideals of the ruling party. One of the biggest mistakes commited here was giving more valuble to economic theory than long-proved economical actions which work, just for the sake of whatever the president and the party wished to implement.

The well-being of people must be above social/economical experiments, specially if one's trying to face such a serious problem as inflation.

Venezuelans have known well about inflation, being a Venezuelan what is said above is the truth. Compared to the previous years Venezuelans seems to recover slowly through the adoption of cryptocurrencies, making use of play to earn tokens and exploring all available possibilities on cryptocurrency. I read about people in Venezuela having cryptocurrency as a common means, even the technology wise lacking people have begun to make use of it through Binance pay and other similar payment gateways. Being the 7th largest population for cryptocurrency adoption the growth will happen soon out of cryptocurrency. The inflation is mostly out of the ruling government who doesn't care for its people rather a specific group.

Crypto and foreign FIAT.

It is curious you put it this way, because the other day I found a clothing store which now accepts Bitcoin, Thether, Binance pay and more suprisingly: Monero.

Crypto currency is a blessing when comes to helping people like us, to recover some control over our money in an authoritarian and reckless administration.