Is Inflation Necessary

[sekalitas]

But is inflation needed?

A little bit of inflation, like around 2%, is actually a good thing for the economy. It nudges people to spend and invest their money because they know it won't be worth as much later. This spending spree helps the economy grow.
But if there's no inflation, or worse, deflation (where prices drop), it's bad news. People start hoarding their cash, hoping it'll be worth more down the line. Nobody's spending, so businesses suffer and the economy stalls or even shrinks.

Why can't we just keep the currency at the same value?

Inflation isn't always a simple thing to control. It can be triggered by a few different things, like if everyone suddenly wants to buy the same stuff, or if it costs more to make things. Even the government's decisions about money can play a role. And it's not just about what's happening within a country's borders either. The world economy is all linked together, so something like a change in oil prices or trade rules in another country can actually mess with inflation back home.

And why does it only happen to money? For example, the same wouldn't happen if we used gold as a currency instead.

Think of money like a tool we use to buy things. When inflation happens, it's the value of that tool that takes a hit. Other stuff, like gold, can also go up or down in value, but not in the same way as our regular money.
Gold has been used as money in the past because it's rare and valuable in itself. But it's not perfect. There's only so much of it, and it's not exactly practical for small transaction.
 

Is inflation a ploy that the government uses so people don't get rich off of savings?

Inflation isn't a great way to tax people, it's more like a last-ditch effort when a government's really desperate for cash.
Now, there can be some short-term perks to inflation. It might actually give the economy a little boost for a while. But in the long run, if you pump more money into the system, prices will just rise to match. So, it's not like governments are intentionally trying to mess with people's savings through inflation. High inflation is actually bad for everyone, so they usually try to keep it at a manageable level.

Reference

• https://mru.org/courses/principles-economics-macroeconomics/why-governments-create-inflation

[DYOR+BTC]

Even though people do not always get well with inflation because of how coat of living is high at inflation period. Inflation is still necessary because it also has it own role in every economy. When there is too much money in circulation in any economy, inflation is use as a means of reducing excessive circulation of money in an economy. It is one of the measures used in control the way money goes in and out in an economy. So inflation is necessary.

[livingfree]

we can complain but somehow life must go on, so we as private employees have to change our mindset, where we have to work harder, and look for additional income to cover current living needs, we can feel the cultural shift happening around us, where for example in the past Many people work together to help one of the residents, but nowadays it rarely happens and the few times we ask for help from other people, it will be calculated with money as a reward.

While the rich getting richer and they can earn money easily because of inflation. We as employees need to do double time of effort and work and even has to do side hustles for us to be able to survive with the current state of the world and economy with inflation.

We should plan our retirement as well because inflation will hit us by that time and when we're older, we can no longer work but if we're able to save up for investments and income generating business, we'd be able to survive that time.

While we've got some things needed to sustain being an old guy, there won't be any problem that we have to deal with that.

[bettercrypto]

As far as I know, inflation in a country has pros and cons. In pros, if the government of each country sees that the inflation level is low or moderate, it can help investors to invest, and when that happens, it can contribute to the country's economy.

When it comes to the cons, when inflation rates increase, the usual thing that happens is that the value of money decreases. where the consumers buy fewer goods. And business people might hesitate to invest for awhile because the cost is high. And when this is the case, it can hinder the growth of the economy.

[Chilwell]

But is inflation needed? Why can't we just keep the currency at the same value?

Maybe the government are trying but keeping the inflation away may just be unavoidable. Some policies may sound good, but on implementation may not provide the required results.

I think currency can not be the same as you think because those countries that are productive wouldn't have the advantage of their products and while it will be in favour of consumer because they will have access to the products very easy and cheap, in our country inflation is our major challenge because we are not productive so everything we used are all import that why we are battling with inflation, our currency keep losing value everyday and our government are just watching all this to happen because the said they are helpless, my country are blessed with many minerals resources which alone can be used to stabilise our currency but unfortunately this foreigner have cage us to the extent that even to breath we need to seek permission from them, they always came to advise us on the economy as if they are not battling there. I don't think governments can't do anything to take away inflation because they are not the one controlling it.

[adaseb]

Inflation at 2% doesn’t cause people to stimulate the economy and help it grow. In certain countries like Swiss or Japan they had negative interest rates in the past where you are being charged interest to hold it in the bank. That is a way to get people to spend it, not low inflation numbers.

We cannot deal life without inflation. Governments need to issue bonds to pay for the country to run and as a result that money comes from money being printed out of thin air. It’s impossible for a country like the US to function without raising money from selling bonds, they hold too much debt.

[lizarder]

But is inflation needed?

It is not necessary because it will cause problems for society and often inflation makes everything more complicated and in the end society bears the risk.

Why can't we just keep the currency at the same value?

The value of fiat currency will continue to devalue that's why we are advised to take it to a more productive place. Like trying to do business or invest because saving money will not provide added value for the future.

And why does it only happen to money? For example, the same wouldn't happen if we used gold as a currency instead. Is inflation a ploy that the government uses so people don't get rich off of savings?

Gold is different from fiat currency, the strength of gold can be seen when the economy is in trouble and gold can be stable to maintain its value. Directly the government also does not want inflation to occur because it can affect the stability of the country, but all policies that are implemented are sometimes not implemented properly.

If inflation is used as a tactic, then many countries will experience problems, unless a country tries to have an economic impact on other countries. They will try to suppress the currency of a particular country with existing policies and if a country's currency weakens then it will be quite risky.

[Rasa nanas]

In general inflation is caused by too much fiat money circulating in society, and this causes the value of the currency to fall. However, there are other factors that can cause inflation, such as national debt. I think using gold as a transaction tool is not a smart solution to avoid inflation because gold is not a transaction tool but tends to be an investment.

[martinex]

Even though people do not always get well with inflation because of how coat of living is high at inflation period. Inflation is still necessary because it also has it own role in every economy. When there is too much money in circulation in any economy, inflation is use as a means of reducing excessive circulation of money in an economy. It is one of the measures used in control the way money goes in and out in an economy. So inflation is necessary.

The pluses and minuses are always there, if that's what the government wants I think it's less efficient, what needs to be improved is how to create new jobs with standard salaries so that when inflation comes, people no longer shout and grumble about the prices of basic goods getting more expensive and will be covered by the money from the salary.

I like the country of Brunei Darussalam until now the people have no problems and they live normally and calmly.

[MissNonFall9]

Even though people do not always get well with inflation because of how coat of living is high at inflation period. Inflation is still necessary because it also has it own role in every economy. When there is too much money in circulation in any economy, inflation is use as a means of reducing excessive circulation of money in an economy. It is one of the measures used in control the way money goes in and out in an economy. So inflation is necessary.

Inflation is not always good and meaningful for a country's economy. It depends on the money flow in the market. Inflation can have both positive and negative effects on a country's economy. For example inflation reduces the opportunity cost of cash in the country and makes people more inclined to spend instead of saving and feel comfortable. Those who work for a fixed salary find it difficult to live as the cost of living increases. On the other hand as the supply of cash in the market is high, individuals or businessmen show interest in doing business. As a result of this new employment is created in the market as well as new entrepreneurs are developed in the country. So inflation means living differently for people with different incomes. That is why the government sometimes uses inflation to deal with economic emergencies but it should be done at a controlled level. If it is not controlled then the country will fall into hyperinflation which will definitely weaken the economic infrastructure of the country.

[pinggoki]

If it's the controlled kind of inflation and the wages of the workers are keeping up with it then yes in theory, it's a necessary thing but with how things are, I don't believe in the necessity of inflation because we're paying too much for it with the low wages and not being able to live our lives because we're all too busy working to keep up with the rent money, grocery, electric bills, gas bills, and water bills, basically almost everyone in the world would be grateful if inflation isn't a thing and that we can all be happy that we can afford with our minimum wage, all the stuff that's so expensive because of inflation. Hedge fund managers won't have anything to do anymore and all of the parasitic groups/companies are going to be going down thus lessening the real parasites like them.

[Abiky]

Gold has natural deflation because the supply of gold is less then the world population growth.  Thats despite the great advances in mining power and technology made in the last century, even after that population growth of the world is greater then the supply of gold.   We cannot change the content of the earths crust for gold, its mostly a constant and well distributed across the globe.  Platinum and other metals are not quite the same as that.

FIAT money has no proper controls on it, its mostly politics that decides just how quickly its destroyed and it never lasts is the lesson from history.  Inflation equates to liquidity for some, gold has been used as money and the economy did well during that time so its not absolutely necessary.   Some will argue inflation delays the possibility of recessions but we are trying to balance giant amounts of debt and this is likely the real reason.

Inflation is inevitable. Especially when banks are in control of monetary supply. They can manipulate the economy to their benefit. Ultimately, the rich get richer, while the poor get poorer.

It's up to you to make a plan that will help you beat inflation in the long term. Investing in Gold, Silver, Bitcoin, and even Real Estate can help you grow your wealth as much as possible. Just spend less than what you earn, and there should be nothing worry about. Who knows how high will inflation rates go?

[uswa56]

As far as I know, inflation in a country has pros and cons. In pros, if the government of each country sees that the inflation level is low or moderate, it can help investors to invest, and when that happens, it can contribute to the country's economy.

When it comes to the cons, when inflation rates increase, the usual thing that happens is that the value of money decreases. where the consumers buy fewer goods. And business people might hesitate to invest for awhile because the cost is high. And when this is the case, it can hinder the growth of the economy.

As you said, it is true that if inflation occurs there will definitely be positive and negative impacts, of course we have to think about the negative impacts first because in a country we will definitely first explore the economic level experienced by our society, regarding the financial situation experienced by the community If we are not good then this inflation will make it very difficult for people to meet their basic needs, of course.

So in this case, many countries do not dare to take the decision to carry out inflation, because the condition of society is financially unstable so that inflation cannot be carried out.

[bitgolden]

Gold has natural deflation because the supply of gold is less then the world population growth.  Thats despite the great advances in mining power and technology made in the last century, even after that population growth of the world is greater then the supply of gold.   We cannot change the content of the earths crust for gold, its mostly a constant and well distributed across the globe.  Platinum and other metals are not quite the same as that.

FIAT money has no proper controls on it, its mostly politics that decides just how quickly its destroyed and it never lasts is the lesson from history.  Inflation equates to liquidity for some, gold has been used as money and the economy did well during that time so its not absolutely necessary.   Some will argue inflation delays the possibility of recessions but we are trying to balance giant amounts of debt and this is likely the real reason.

Inflation is inevitable. Especially when banks are in control of monetary supply. They can manipulate the economy to their benefit. Ultimately, the rich get richer, while the poor get poorer.

It's up to you to make a plan that will help you beat inflation in the long term. Investing in Gold, Silver, Bitcoin, and even Real Estate can help you grow your wealth as much as possible. Just spend less than what you earn, and there should be nothing worry about. Who knows how high will inflation rates go?

I do agree that if you plan inflation into your future and act accordingly then you are going to be doing fine. That is why I think it's quite important to make sure that we are going to end up with something that will be fine, and this is why I think it is going to be something that will not be all that complicated, we just need to make sure that things going to be just fine. I know that it is not simple and it takes time, but if we are patient and have a plan then in the end the result will be quite well off.

This of course depends on how we could grow better and bigger, so in that case we are going to just do something that is not going to be all that complicated. Just realize that things are tough when you are not careful.

[wiss19]

If inflation is used as a tactic, then many countries will experience problems, unless a country tries to have an economic impact on other countries. They will try to suppress the currency of a particular country with existing policies and if a country's currency weakens then it will be quite risky.

It is needed, it doesn't create problem for the society at a small level, you need to think of high inflation. If you have it at 20% then yeah it's a problem, if you have it something more than that (which some nations do) then it's even a bigger issue, but if we are talking about 2-3% then we are talking about something that is good for the growth and you should have it.

Zero inflation means that there is no growth and that would mean that the nation has a stagnant economy and that would not help anyone, big companies would just earn more money and everyone else would lose. Growth is needed so that big companies would get that growth, and you would get a little bit as well, and everyone would profit from that situation.

[lizarder]

It is needed, it doesn't create problem for the society at a small level, you need to think of high inflation. If you have it at 20% then yeah it's a problem, if you have it something more than that (which some nations do) then it's even a bigger issue, but if we are talking about 2-3% then we are talking about something that is good for the growth and you should have it.

Zero inflation means that there is no growth and that would mean that the nation has a stagnant economy and that would not help anyone, big companies would just earn more money and everyone else would lose. Growth is needed so that big companies would get that growth, and you would get a little bit as well, and everyone would profit from that situation.

If a country experiences stagnation regarding the economic growth of a country then it has a big impact on people's lives because there will be an imbalance that occurs. So that the public sector which is usually a step to support people's lives will have problems, such as food problems and so on. The state has a responsibility for the economic growth cycle and they have ranks to control the prices of goods in the market. What happens is that they do not side with the people and consider more the problems of companies and the problems of the country's economy.

Usually this happens because the government is corrupt and has no vision in managing the country and although in certain cases all countries experience the impact of inflation or recession at an uncalculated stage because certain problems occur. Economic growth is very important because it speaks of a wide scope and if there is no principle to control then the problem will arise bigger.

[trendcoin]

Imagine you are a king in the Middle Ages, constantly making new conquests. The gold you have access to is limited and after a certain point you cannot access new gold supplies. What do you do to persuade your army to make new conquests? Do you have any other choice but to add silver to the gold coinage? Today, instead of making new conquests, we are building up our countries to join the ranks of developed countries. We don't have unlimited gold mines, and worse, we are not even in a position to put silver into gold coins like a middle age king, so we use paper money, which is the only thing we can do, and we solve all problems with inflationary strategies...

I am accumulating gold, silver and Bitcoin, which are in limited supply, but these are the harsh realities of life and I cannot ignore them...

[jaberwock]

If a country experiences stagnation regarding the economic growth of a country then it has a big impact on people's lives because there will be an imbalance that occurs. So that the public sector which is usually a step to support people's lives will have problems, such as food problems and so on. The state has a responsibility for the economic growth cycle and they have ranks to control the prices of goods in the market. What happens is that they do not side with the people and consider more the problems of companies and the problems of the country's economy.

Usually this happens because the government is corrupt and has no vision in managing the country and although in certain cases all countries experience the impact of inflation or recession at an uncalculated stage because certain problems occur. Economic growth is very important because it speaks of a wide scope and if there is no principle to control then the problem will arise bigger.

I would guess that you are right that stagnation would result with big companies keep taking money, while smaller investor or just regular people not growing with it, so all the big companies would take all the money. But when we are talking about stagnation, we should not just take it face value, we can't just say this is why it is bad, we should compare it to make sure that it is bad.

So, when you compare stagnation to inflation, which one seems worse to you? I would say a very very high inflation could be much worse, of course a 5% inflation would be fine, that is not too much, I think people can live with that, anything under is perfect, but what if you had like those famous 100%+ ones? Argentina had one, Zimbabwe certainly had a lot more, and Türkiye recently had one I believe. Those are much worse than stagnation.

[lizarder]

I would guess that you are right that stagnation would result with big companies keep taking money, while smaller investor or just regular people not growing with it, so all the big companies would take all the money. But when we are talking about stagnation, we should not just take it face value, we can't just say this is why it is bad, we should compare it to make sure that it is bad.

So, when you compare stagnation to inflation, which one seems worse to you? I would say a very very high inflation could be much worse, of course a 5% inflation would be fine, that is not too much, I think people can live with that, anything under is perfect, but what if you had like those famous 100%+ ones? Argentina had one, Zimbabwe certainly had a lot more, and Türkiye recently had one I believe. Those are much worse than stagnation.

When stagnation happens then the whole sector gets worse and the ones who benefit are the ones who have the big capabilities like the companies. Meanwhile, economic growth in the lower middle class will be hit so hard and they will even have to close all businesses that have been built for a long time. I don't look far because that happened when Covid hit and hundreds of small and medium businesses had to close all their businesses because they could from the stagnation of economic growth.

Both are much worse because they have the same role in killing economic growth. Like some of the countries you mentioned and maybe even many more who feel the impact of all that. The broader solution is that the government must have a way to overcome it and each individual also tries to prevent inflation so that it can be restored simultaneously.

[CageMabok]

In general inflation is caused by too much fiat money circulating in society, and this causes the value of the currency to fall. However, there are other factors that can cause inflation, such as national debt. I think using gold as a transaction tool is not a smart solution to avoid inflation because gold is not a transaction tool but tends to be an investment.

In fact, it is not a matter of whether or not gold can be used as a transaction tool at this time in order to avoid inflation itself which is still rife nowadays. But it is more difficult for all countries to implement it at one time because developed countries can still avoid inflation with their own efforts so that the impact of the decline in the value of their own currency is not too much. So this is also still being considered by countries that are not developed in an effort to ensure that inflation can continue to decrease every year.