Why is Inflation Happening All Over the World At Once?

[BRINIRHA]

Inflation is happening all over the world at once due to disruptions caused by the Covid-19 pandemic, expansionary monetary policies, geopolitical tensions and trade disputes and rising commodity prices. During the pandemic it caused shortages of goods and services as well as disrupted of supply chains, which led to increased prices. Central banks around the world have implemented expansionary monetary policies, such as low interest rates and quantitative easing, to stimulate economic growth. While these policies have been successful in boosting demand, they have also led to an increase in money supply, which can lead to inflation. Geopolitical tensions and trade disputes have disrupted global trade and increased the cost of goods and services. Commodity prices such as oil and gas have also contributed to inflation.

yeah that's right. In essence, everything really started from the Covid19 Pandemic which hit almost all countries on this earth. So it is only natural that now the economic impacts experienced by all countries also have similarities. Starting with inflation caused by various factors as you mentioned. and also then the other fear right now is RECESSION. where the level of economic growth has not yet recovered and the unemployment rate has also increased quite rapidly. but this recession is also the result of the government trying to avoid inflation by raising interest rates which makes the circulation of currency withdrawn slowly. so that the economic downturn also occurs. And now even the US has temporarily stopped raising interest rates because a recession is in front of them. but in contrast to inflation that hit almost all countries. it turns out that the Recession did not hit the whole country. because in Asia it seems that the recession is not too worried for some countries.

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[CODE200]

The world is a global village and different nations inside it depends on the goods and services of each other to survive. Therefore inflation in one nation will somehow spill into the nation that they supply goods or services to. In turn the supplied nation will also have something to transaction with another country. So the oil that touches one finger will find it's way to affect other fingers.

Like some members have commented here, any global disaster will somehow affect the economies of all the nations. An example is the covid19 pandemic.

That's not always the case, although I do agree, the bigger factor would probably be the leadership in a country because if the government is corrupt, even if they're not affected much by their relationship with other countries, the economy will still suffer because corruption robs people what they deserve. So even if you say that the world is a global village, each village doesn't really like it when other villages try to meddle with their affairs. It won't be labeled as a global disaster if it doesn't affect everyone in the globe.

[Tervelatuk]

The amount of money in circulation continues to increase will cause inflation in a country, this will have an impact on prices which will also continue to rise. If the amount of money in circulation doubles, prices will also double. An increase in the amount of money in circulation can occur, for example, if the government uses a deficit budget system.

There are many factors that cause inflation, not only the excessive printing of money but there are also other factors caused by supply that trigger an increase in the bid price of an item, including goods that must be imported into a country. as well as the prices of goods controlled by the government such as the increase in the price of domestic fuel oil, the increase in world oil prices and the increase in the basic electricity tariff. Supply activity has a very significant impact on inflation in a country or even the world.

Apart from this, the continuous increase in production costs over an uncertain period of time can also trigger inflation in a country. But in simple terms, the impact that directly occurs is on the supply of goods. In addition to other causes, inflation is caused by increased demand and increased supply. a situation where supply and demand are unbalanced or demand for goods and services increases. This is what causes production factors and the availability of goods to experience a downturn and substitute goods to be reduced, limited or eliminated. This moment is usually used by sellers to increase the price of goods drastically causing inflation.

[romero121]

Through the trade, import and export every economy is connected to each other. This means everyone have got the advantage and better money making on some products. When this gets affected the entire budget gets affected. This is a major cause. Another thing is the additional need, based on the budget the allocation for specific need will be specific amount, but the inflation doesn't let this to be fulfilled. This also causes additional money requirement. So, the planned money flow won't happen and more compromise takes place. From COVID every country have affected with its supply and the money shortage have arisen. Some countries kept printing currencies and that causes heavy inflation.

[STT]

Whats the statistic that I saw, one quarter of all dollars ever created since the origins of the USA have been done in a single year recently.   If thats true you dont need any elaborate explanation for why there is a sudden lump of rising prices occurring.   The face value of a currency note must equate to a value exchangeable in some way, if all they did is produce suddenly twice as many notes then the value halves and every price doubles.     To me the most simple reason is also the most likely.

[Lubang Bawah]

Inflation can occur globally and has a domino effect because no country can provide for itself, it is proven that when a country is subject to an economic embargo, the country slowly weakens, interdependence makes problems impact other countries, this is the source of the problem why inflation can occur over the world at oncee.

[tiCeR]

IMO, Fiat is monopoly money, going back and forth is also wrong. The higher the interest rate, the greater the inflation and if the interest rate is lowered, the inflation will remain the same, but the effect will be different. because it is the monopoly nature that refers to the fact that only the government has the authority to print or issue such fiat.

Because Inflation is a complex economic phenomenon that is influenced by many factors as well, including monetary policy, fiscal policy, demand and supply and external factors such as commodity prices. Inflation can also be affected by global events, such as fluctuations in world oil prices or changes in international trade policies. So, inflation occurs all over the world because there are factors that are interrelated and vary in each country. That's why inflation occurs all at once throughout the world.

I coincidentally saw your post here and read that you believe higher interest rates increase inflation, but do you understand why the FED increased interest rates significantly for a while now? Because higher interest rates incentivize people to hoard their money instead of spending it, thereby removing it from circulation. Higher interest rates are supposed to decrease inflation and that does not only count for daily purchases in the super market, but also to the real estate market. A hike in interest rates make it harder for people to borrow money, buy a house and repay the mortgage. Less mortgage-financed houses means less demand for houses, means house prices go down as less demand meets more or less stable supply. I say more or less stable because I assume that the supply side is less elastic to interest changes than the demand side. I actually didn't check that, it is my assumption. But to summarize, increased interest rates are supposed to decrease inflation, not to increase it.   

[Framelover]

Why does inflation in one country or continent affect the others. Why does it seem like the whole world is experiencing a global economic downturn all at once despite having different economies, different policies, different politics? Here's what I mean from these news

The world is interconnected and this plays a major role. Countries rely on each other for sourcing of goods and services and thus when inflation hits a country, it affects the prices of importation of goods leading to higher cost for the other nations and can contribute globally. Also, currency exchange rates can influence inflation such that if a country’s currency depreciates drastically, the cost of imported goods also increases. Trade relationships, foreign investments, financial flow, amongst others link countries together and can contribute to a global economic downturn.

[Aanuoluwatofunmi]

There are many causes to inflation and this is what is commonly affected to most countries in the world, the natural pandemic occurrences constitute to this, low economy performance also increases the chances for having inflation and when the country is too dependent of other countries for their existance, there need to be a way we can adopt to develop ourselves by being independent and take measures to reduce the rate to economy lost globally.

[Halime Anatolia]

Why does inflation in one country or continent affect the others. Why does it seem like the whole world is experiencing a global economic downturn all at once despite having different economies, different policies, different politics? Here's what I mean from these news headline

- Inflation resurges to 21.82 % over rising food prices

This is a factor that must be prioritized for initial treatment. Many people who complain about the increase in the price of staple foods here are not the reduced supply, but the government's policy in dealing with prices not to increase beyond reasonable limits. What is causing it is that the average person's income is no longer enough to handle it and other issues. Just like a car if there is no oil which one can run??

[Inwestour]

Through the trade, import and export every economy is connected to each other. This means everyone have got the advantage and better money making on some products. When this gets affected the entire budget gets affected. This is a major cause. Another thing is the additional need, based on the budget the allocation for specific need will be specific amount, but the inflation doesn't let this to be fulfilled. This also causes additional money requirement. So, the planned money flow won't happen and more compromise takes place. From COVID every country have affected with its supply and the money shortage have arisen. Some countries kept printing currencies and that causes heavy inflation.

The main reason is that in times of covid, almost everything stopped, economists warned about the consequences of this actions, and they predicted that this would not happen immediately, but after some time.

At that moment, to stimulate this comic country began to print a lot of money. Most countries with higher inflation and without covid have been printing a lot of money, and in times of crisis this value always increases. The US also surprised with its decision to print so many dollars, which also had a global impact on the entire world economy.

The big problem is that governments don't see any other way to save economy other than printing new money, which is the easiest way they know of, but it has never led to good results globaly.

[Kadal Ijo]

Inflation can occur simultaneously because many countries depend on 1 or 2 currencies such as the USD, and we know that America is currently experiencing many difficulties so that when economic problems occur with the owner of the world currency it will automatically spread to other countries throughout the world.