Inflation, The Money Devaluer.

Tell me one thing that you know that its price has reduced since you were a child. It is no news that the price of goods and services has been on the rise since your birth and it is certainly going to be that way till you leave the surface of the earth. Why does this happen, it is because of Inflation.

While inflation rate goes up, the government tries to reduce inflation. An inflation rise of 2.7% from 0.6% is large enough to cause panic in a country.

Inflation can be caused by so many reasons one of which is cost-push inflation where the price of produce increases from producers to consumers caused by cost of production, payment of workers, and so on. Inflation could also accurately as a result of high demand of a product. This is known as demand inflation, and this can be reduced by lowering tax. A fall in interest rate always lead to short term enjoyment but in the long run, it can be very detrimental.

While the above mentioned can be managed, one type of inflatinlon that affect a lot is as a result of government printing money either by increasing government debt, bonds, or by printing in more fiat into the economy. When this occurs, the value of the currency starts to lose its value due to its excessive influx. People have a lot of money and the money is spent on the same thing causing the price to increase.

Not everything inflates at the same percentage. Some thin go extremely high that they become hyper inflated. With inflation price increases and savings loses it value. Factors such as cost of materials, labour's, productivity, Exchange rate of currencies, tax, interest and so many more are the reason why inflation will never be stable or low.