Everything You Need to Know About Inflation

Piles of German money in a Berlin bank during the post-World War I hyper-inflation. In 1923 an American dollar was worth 800 million German marks.
  • A stressed government budget (The United States’ national debt is beyond $26 trillion and increasing rapidly by the second)
  • Sociopolitical upheaval (no elaboration is necessary)
  • A “collapse” of the supply of goods (McKinsey notes that the food supply is among the victims of the pandemic)
  • A decline in borrowing and lending (Quartz reported earlier this year a notable decline in business loans)
  • A higher cost of goods, often without a corresponding increase in wages to match rising prices
  • Less investment and lending amidst massive economic uncertainty
  • Less production of goods and services due to less business investment, which further increases prices because of scarcity of in-demand products and services
  • Loss of savings because the value of each dollar saved decreases drastically
  • Hoarding of goods and assets with tangible value, which further restricts supplies (think: toilet paper and ammunition in the early days of the pandemic)
  • Job losses as the effect of lesser investment leads to contraction among individual businesses

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