What Is Inflation?


what is inflation simply put inflation is the increase in the price of goods and services within an economy over a set period of time going a little deeper the rise in prices must be sustained and not just the sporadic event while prices may go up suddenly on an item this may not necessarily mean inflation is occurring instead inflation refers to a sustained increase in costs of nearly all items in the economy over an extended period of time what causes inflation economists have identified two basic causes of inflation first there must be a rapid increase in the amount of actual currency in circulation for instance when European conquistadors conquered the Western Hemisphere in the 15th century gold and silver bullion flooded into Europe causing inflation second inflation can occur due to a supply shortage in a specific good that is in high demand this can then spark a rise in the price of that good which may ripple through the rest of the economy the result can be a general rise in prices across nearly all goods and services after World War Two in Hungary between 1945 and 1946 the Hungarian Penge experienced one of the worst occurrences of hyperinflation ever recorded on the first of January 1946 a temporary unit of currency was introduced to cool the a’dope NJ in an effort to stabilize the Penge when it was introduced 1 a doping day was equivalent to 1 peg a and was only used by the governments and commercial banks as an accounting measure by the 1st of June 1946 when a doping game was now equivalent to a hundred and sixty thousand peg a having undergone sixty million percent inflation within six months shortly after this the a’dope engei became legal tender and by the 31st of July 1946 1 a doping gave was equivalent to 2 sextillion peg a on the 1st of August 1946 another new currency the forint was introduced as a replacement to the peg a at a rate of 400 octillion peg a per forint while national governments tried to control inflation Bitcoin and other cryptocurrencies are seen by many as a good hedge against the ravages of inflation this is due to the fact that bitcoin has a fixed total supply of 20 million coins despite some controversies many believe that this makes Bitcoin a deflationary currency and therefore resistant to inflation for this reason many countries that are currently undergoing inflation have begun using Bitcoin or other crypto currencies as an alternative to their legal tender in order to cope with the nation’s inflation stay tuned for more content and don’t forget to check out our other videos at finance Academy

2 thoughts on “What Is Inflation?”

  1. But deflation is worse than hyperinflation.

    In deflation. You are discouraged to use the currency hence staggering economic growth.

    Economics says low inflation (1.8%-3%) every year is good for economies.

    so unless bitcoin became stable or upgrades added so that "printing" bitcoin is inflationary yet mathematical to avoid hyperinflation.

    I won't say it as currency. Or used as money.

    But

    It is a product that is a good store of value, pegged to accepting entities (blockchain entities)

    Hence I believe in bitcoin not as a currency but something that blockchain.

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