However, the first step in this process, though, is learning more about the general nature of inflation.A little inflation is good because it sets up expectations of future price increases.What is inflation, how is it calculated and why is the measure important.
For it reduces the purchasing power of end users through decrease of the value of money.Every six weeks, the Federal Reserve Board of the Open Market Operations Committee (FOMC) meets to set both the Fed funds rate and the discount rate, changing the inflation levels each time the rates go up or down.By examining the price of goods on a general level, the Fed can make decisions about whether or not to raise interest rates in an attempt to keep the market on a relatively stable level.There is a tendency to treat inflation as a singular beast, one that always threatens Americans with higher prices and particular pain for those on fixed.Former Fed Chair Greenspan even said that a fall in inflation rates would ruin our economy as a whole.
That is why investors are right to be worried about higher inflation as demand picks up.Excessive inflation, though, can be as problematic as the deflation process.It would seem intuitively obvious that low inflation is good for consumers, because costs are not rising faster than their paychecks.
That makes people buy now rather than later, increasing demand.
This post i wanted to touch on point why dime coin stands out by having 460 billion coins and why i feel I should implement a low inflation rate once all the coins.Inflation is just pressure that keeps money moving through the system.When inflation is too high of course, it is not good for the economy or individuals.Yesterday I talked about what inflation is and what can cause it.Posted In: Drivers of Value, Economics, Portfolio Management.
Well, at least sometimes - we discuss when declining purchasing power is actually better for the economy as a whole.Find out why some economists and public policy makers believe that inflation is a good, or even necessary, phenomenon to help economic growth.
To have a vibrant economy, you want money to constantly be in action rather than.The inflation rate is widely calculated by calculating the movement or change in a price index, usually the consumer price index.
Three Reasons Why It Is Still a Good Time to Talk about Inflation.Why there tends to be moderate inflation during good economies. Moderate inflation in a good economy.Why Higher Inflation Is A Very, Very Bad. we are going to take a deep dive into the numbers to show just why—and how.Why does the Federal Reserve aim for 2 percent inflation over time.