Causes of rising global inflation ................
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Posted On: 12/11/2021 10:06:44 AM
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Causes of rising global inflation ...........................................
All products are made from natural resources and all product prices are influenced by commodity prices and manufacturing cost (material cost, labor cost, overhead cost, profit). Higher the manufacturing cost, higher the sale prices and higher the inflation.
As long as the astronomical amount of printed money stays in the goverment's depository, the money printed has little effect on inflation, but as soon as the money goes into circulation either through buying back debts or through economic stimulation or through military spending, the astronomical amount of printed money will flood the financial market, chasing after finite and limited natural resources, then naturally commodity prices will rise which in turn will fuel higher inflation.
The average annual inflation compounding over the past 40 years is 10%, it means cost of living has gone up 4 times over the past 40 years, but some essential items like rent, real estate prices and gasoline have gone up 10 time. At 6% inflation and with the compounding effect, cost of living will be more than double 12 years from now and will be 4 times what it is today 24 years from now. Inflation is not temporary or transitory, it will accelerate with acclerating money supplies around the world. Global hyper inflation is inevitable.
Rising inflation has nothing to do with the shortage caused by the Corona Virus, the seed of inflation has been planted since the beginning of the Commodity SuperCycle that began in late 1980's as China emerged as the world's economic power. China's economic boom induced a global economic boom and the expanding global economy triggered increasing money supply to sustain global economic expansion. But the 1.4 billion fierce dragons are devouring all the metals and lumbers in construction in all sectors of the Chinese economy, also as the overall Chinese population gets richer, they consume more food, driving up commodity prices of basic agricultural products that make the food.
As global money supplies accelerate and demands for commodities continue to rise amid the expanding Chinese economy to become the world's biggest economy and as the world drowns in growing debts, the world will be heading for a hyper inflation as nations inflate themselves out of debts. In a runaway inflation paper money will be good only for wall paper or toilet paper. It happened in China during the Great Depression of 1930's, it will happen again globally. Throughout history gold is considered as the Real Money but has been replaced by fiat money. In a global financial apocalypse, gold will be the last safe haven the whole world will be hoarding amid erosion of purchasing power of fiat money.
Fiat money
https://www.investopedia.com/terms/f/fiatmoney.asp
All products are made from natural resources and all product prices are influenced by commodity prices and manufacturing cost (material cost, labor cost, overhead cost, profit). Higher the manufacturing cost, higher the sale prices and higher the inflation.
As long as the astronomical amount of printed money stays in the goverment's depository, the money printed has little effect on inflation, but as soon as the money goes into circulation either through buying back debts or through economic stimulation or through military spending, the astronomical amount of printed money will flood the financial market, chasing after finite and limited natural resources, then naturally commodity prices will rise which in turn will fuel higher inflation.
The average annual inflation compounding over the past 40 years is 10%, it means cost of living has gone up 4 times over the past 40 years, but some essential items like rent, real estate prices and gasoline have gone up 10 time. At 6% inflation and with the compounding effect, cost of living will be more than double 12 years from now and will be 4 times what it is today 24 years from now. Inflation is not temporary or transitory, it will accelerate with acclerating money supplies around the world. Global hyper inflation is inevitable.
Rising inflation has nothing to do with the shortage caused by the Corona Virus, the seed of inflation has been planted since the beginning of the Commodity SuperCycle that began in late 1980's as China emerged as the world's economic power. China's economic boom induced a global economic boom and the expanding global economy triggered increasing money supply to sustain global economic expansion. But the 1.4 billion fierce dragons are devouring all the metals and lumbers in construction in all sectors of the Chinese economy, also as the overall Chinese population gets richer, they consume more food, driving up commodity prices of basic agricultural products that make the food.
As global money supplies accelerate and demands for commodities continue to rise amid the expanding Chinese economy to become the world's biggest economy and as the world drowns in growing debts, the world will be heading for a hyper inflation as nations inflate themselves out of debts. In a runaway inflation paper money will be good only for wall paper or toilet paper. It happened in China during the Great Depression of 1930's, it will happen again globally. Throughout history gold is considered as the Real Money but has been replaced by fiat money. In a global financial apocalypse, gold will be the last safe haven the whole world will be hoarding amid erosion of purchasing power of fiat money.
Fiat money
https://www.investopedia.com/terms/f/fiatmoney.asp
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