I actually didn’t know that much about this matter, but I’m that type of person who wants to be informed as much as possible with what’s happening in the world. That’s the least I can do, than just to sit here and wait for everything to end. That’s gonna happen for sure, but at least somehow, I can sit on a conversation and participates or give my opinion regarding on the current issues that’s going on, rather than just agreed or disagreed on things that I know nothing about. And I don’t really wanna just sound a smart ass, when in reality, I’m a noob poop inside.
So what is “INFLATION” and why do we need to know something about it?
Title: Inflation: What Does It Mean?
Published Date: July 10, 2022
Author: alykavinsky So to shorten its definition. Inflation is when there’s more money in the economy than stuff to spend it on.
One of the things we’re dealing with everyday are the different increases on products and services that we use and consume. Maybe one day, we will wake up and the things that we can afford before are unaffordable anymore.
For example; When I was in college back in the year 2008, movie tickets prices are just around Php. 120, or around $2.14. But these days, movie tickets are around Php. 280, or around $5. It doubled over the course of 14 years, more than doubled actually. And gas prices before are just around Php. 48 in liters, but it’s around Php. 95 right now.
The thing is that, products and services costs gets higher and higher, but our wages costs remains the same.
Actually, inflation wouldn’t be a big problem if everything are increasing equally, including our wages. It’s okay if prices are increasing by 10% each year, as long as wages are increasing the same percentage like 10% as well. But the thing is, problem still occured because there are other expenses that increases differently over the years, like housing, foods, oil, and other services.
The question here is, why is inflation happening? And do we need to get worried about it?
There are actually 2 basic types of inflation. Number one is called “COST-PUSH INFLATION”. This happens when different industries have no choice but to raise the prices on their products, because wages and raw materials they use to make their products, rises as well. For example, a shampoo company will raise their prices on their products, if the chemicals they use to make those shampoo, increases too. That’s the only thing they can do to continue earning some profit, and to stay on operation rather than keep their products on lower prices which leads to lay-off on their company, or worse, shutdown their operation.
Nunber two is “DEMAND-PULL INFLATION”. This one happens when there are a rapid increase of consumers on a certain products but the supplier can’t keep up on the sudden increase on demands. When an economy performed so well, demand for products keeps on increasing. For example, when there are a lot of consumers who wanted to buy a milktea, prices on the said product will keeps on rising just to slow down its rapid demands.
That’s why our government, contributes a lot of factor when it comes to inflation. For example, they will lower the taxes which is we thought is a good thing because we can rebate more money than what we expected. But the thing is, the more money that we have, the more products we consume, which only means more demands, and suppliers has the chance to keep the prices of their products take on a rapid increase. That’s why lower taxes idea is nothing but a rubbish front to be honest.
But you know that inflation is a good thing when it happens only on small doses?
In the Philippines, it’s Bangko Sentral Ng Pilipinas’s responsibility to keep things on balance, and makes our economy growing while promoting the prices stability as well. But aside from that, they are trying to keep the inflation rate on a lower and on a stable level as much as possible. It’s also a protection for us consumer, because our government are making sure, that prices on products that we consume are still reasonable and still affordable, specially on the primary consumer products. BSP and our government are also the one whose in control on how much money they need to grow in our country, but we’re the one who will decides on how we will protect our money over inflation rate.
The number one solution to avoid inflation is “INVESTING”. I think we all know how investing works rather than just saving our money right? We can invest on stock market, mutual funds, crypto, real state and other investment that you know. It’s always better to find investment vehicles so that our money will keeps on earning more than the cost of inflation rate.
Let your money work for you. So don’t just save, SAVE & INVEST.
Because nothing in this world is permanent. It’s a fast phasing era that we are in, and we can’t do anything but to grind and keep up to this rapid changes, so we can still continue living a comfortable and financially stable life. Because if we never keep up, the savings that we have that once can buy a property, can only buy a candy in the future.
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I’m writing different topic for a change. Hehe I know my mind are just full of “bubba” thoughts, so I’m letting it rest for now, so she won’t get used to my cheesy blogs and nonstop simping. Hahaha ‘til next time. See y’all!
