For most people, inflation may not be a very good thing, because they need to pay more for food and life. Because of this, we need to pay attention to the economic world and to prepare for inflation, is there any signs of this. by definition, inflation – is the steady increase in the sustainable improvement of the general level of prices for goods and services. People use the annual percentage when referring to him.
Because of the close relationship between inflation and money is so much influence on our lives. As already mentioned, when the inflation rate is high, we actually pay less. This means that the value of our money is reduced in line with inflation. Thus, our purchasing power is also lower. Therefore, it is important to look for any signs of inflation.
The most obvious sign of inflation & # 39 is the price of goods. The sudden rise in prices after 1 or 2 months may be associated not with inflation and seasonal factors. We are looking for an increase in commodity prices upward trend. We can refer to the moving figures in the CRB Index in the past nine months. If an index of commodity prices will increase in the trend, inflation may occur.
It is not enough to draw a conclusion about the presence of inflation, looking only at the price of goods. We can also look at the trend in consumer prices, the truly orthodox. True Orthodox – a powerful index of inflation, which is used by government agencies in many countries. Determination of True Orthodox US Bureau of Labor Statistics' with & # 39 is a measure of the average change in prices that urban consumers pay for the time the market basket of goods and services from suppliers. " If true-orthodox shows a tendency to increase, inflation can occur.
In addition to the cost of the goods and the CPI is always useful to look at the price of gold. Because gold is less interconnected with other commodities and & # 39 is a safe haven for investors during the financial crisis and inflation. Thus, the price of gold will rise in price in the period of inflation. It is no coincidence, but actually shows statistics from the Bureau of research studies.
The interest rate has always been a hot topic for economists, as well as a good sign of inflation. If inflation will be long-term interest rates are high and are growing. This is because the money lenders require a return on their money. To get a profit, their interest rate must be higher than inflation. Thus, the interest rate increases in the presence of inflation.