Let's Talk About the Causes of Inflation

Let's Talk About the Causes of Inflation

Let's Talk About the Causes of Inflation

What are some of the causes of inflation? That depends on who you ask and what day it is. Everyone has an answer to the question and no two answers are alike. Researchers and analysts have been studying and writing reports on this topic for 100 years. So let's look at what some of the main causes of inflation are and some of the major concerns.

Inflation is when the cost of products or goods increase within the market. These increases are passed on to consumers due to the rising costs on various things such as gas, food, building supplies, clothes, appliances, and almost anything that has a price tag. The causes of inflation vary according to each industry. With that said, the cost of fuel and gasoline affect almost all industries and businesses.

The Egypt and Libya crisis is not helping. In fact it is only adding fuel to the fire. With the sparks of protests, and much speculation of fuel problems.

One of the major causes of inflation is the supply and demand of crude oil. The supply and demand of crude oil is often of conflict in the Middle East. When crude oil supplies are cut off, gasoline prices rise. When gasoline prices rise, the trucking industry and transportation industries are greatly affected. Supplies and products are at a premium to transport when fuel prices increase. So, one of the biggest causes of inflation is the price of gas.

The supply of money is another one of the major causes of inflation. Realistic demand for products or services and the availability of supplies account for fluctuations in the money market. It's commonly known when inflation slowly but steadily rises, the supply of money is growing faster than the economy. Banks and debt are another one of the major causes of inflation. Throw in interest rates, other major causes of inflation, and you've pretty well summed up those on the top of the list.

In general, the causes of inflation can be attributed to almost anything. But since the start of 2011, there has been many problems that have not helped. Crops been damaged by severe weather patterns, price of commodities has been dramatically increasing over the years. And with the printing off of money by the US government, the US dollar is not worth about half of what it use to be. As these things worsen, it will affect each and everyone of us in 2011 & 2012.

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