What causes inflation?
Inflation has been very high recently, but what causes that?
Recently inflation has been higher than usual with all the conflict going on in the world between Russia and Ukraine, but inflation can happen in many different ways. One way inflation happens is by the government printing money, just like in Germany, 1923. Before 1923 the rate of German marks to American dollars was 4.2 to 1, after 1923 the rate was 4.2 trillion to 1, but that’s just an extreme case.
Another extreme case is in Zimbabwe, from 1998 to 2009 the inflation rate of Zimbabwe rapidly rose caused by many economic shocks. Zimbabwe’s currency rate was 10 trillion Zimbabwe dollars to 8 dollars USD.
Another reason for inflation is the supply chain shortage, when the supplies can’t get over to America or are delayed it makes the products more expensive, since we can’t get as much of it. The last reason I will be talking about, and the reason gas prices are so high. Part of it is because of the war between Russia and Ukraine, because of the economic sanctions we put on Russia it has been harder to get oil. Therefore the gas has been more and more expensive.
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https://www.forbes.com/advisor/investing/why-is-inflation-rising-right-now/
https://www.imf.org/external/pubs/ft/fandd/basics/30-inflation.htm
https://www.wsj.com/articles/us-inflation-consumer-price-index-january-2022-11644452274
