Why are the prices of goods and services always increasing over time ?
In economics they say that the cost of a particular commodity is determined by the quality of production, which states that the quality of a particular goods is determined by the class of consumers that commodity is provided for, this production quality causes some goods and services to value higher than others with lower production quality solving the same problem in the same time-frame, this is not what we are focusing on right now but on something else. Technology introduced a Cheaper Fiber Materials to replace steel plates used in the production of car body-works, instead of the cars getting cheaper, it spiked higher, is it that the cheaper fiber materials are not actually cheap or something else is going on ?
Why is Food, Fixtures and Appliances for homes and human consumption and utilization for humanity’s security and comfort costlier than before?
Will these things ever back down to lower prices with better quality someday ?
Why is the price of goods always inflating, what can we do to curb the situation ?
To Answer these we have a term that the Economic Academia have used to identify this phenomenon, “Inflation”.
Inflation is the result of man’s activities with Money which affects the purchasing power of that particular currency’s value.
We are living in a system where everything is centered around money, it is a commodity we used to settle transactions and quantify the value of a commodity, be it produced, rendered, nurtured, possessed, owned etc.
Money is such an essential commodity as it is the driving force of every economy, Money makes the world go round. Money is a Floating ( Liquid ) Asset. It is used to measure wealth and Financial Strength of Individuals, Organizations, Nations and The World at Large.
The funny thing in money is that when it is too much in circulation more than what is been produced for consumption and commercial by her community of users, be it products or services, there is an increase in the price of commodity that particular currency can purchase around her borders which means a dwindling purchasing power for that currency, this is called inflation. As the volume of money in circulation surges, it causes the demand of some commodities to increase. Likewise, when money is removed from the community to be lower than the amount required for the economy to run smoothly in a steady purchasing power value the amount required to purchase becomes low and the money to obtain those commodities become harder to obtain. Thereby increasing the purchasing power of that particular currency only if the economy produces goods and services for herself to satisfy local consumption, if not so they will experience a higher price value in goods and services causing outcry and stagnation of economic growth due to external influences affecting the price of commodities in the economy with few money in circulation without local products and services that satisfy local need.
The Evaluation of a Nation’s Financial Strength (Exchange Rate) is calculated by how much her nation can produce and how often the accepted and approved money as Legal Tender in a particular jurisdiction can be used in settling transactions within her borders of authority over a specified period of time.
Money also is plunging humanity downhill and making all run the Rat Cheese Race looking for this essential commodity in whichever way we can grab hold of it, this same commodity is used as a weapon and bait to Entrap, Enslave and Control Humanity. In our History we have experienced economies collapse like in Germany just after World War I, In Venezuela, Zimbabwe, Afghanistan and many other nations as their money fall into a worthless state and then the nation adapts another nation’s currency or restructure their economy. Why does these nations collapse when people who reside there use this money to settle transactions or is the money in circulation more than the amount the people in that Nation can handle and manage ?
This have happened to nations like Germany in time passed due to the sponsoring of World War I, but today Germany is among the strongest economies in Europe that encourages internal local production investments as their money circulates within Local Industries instead of opting for International Transactions by granting loans to International Institutions they concentrate on investing and granting loans to local investments which enhances the economy, circulating her currency more frequently within her borders. Record shows how much Money Value Germany brought to the table in percentage when the EU Euro Currency is been initiated and how much deficit Greece the Land of Great Philosophers whose Ideology is used to run the world today brought. We know how Japan’s Economy is robust even when we say their money is low in International Exchange Rates, the economy is more stable and welcoming than those who claim to have higher money value in terms of exchange rates, in fact merchants from inflation infested neighbors travel there to purchase goods with low inflation rates to sell in their homeland as China is an Example, We can also see the effect in Nissan and Toyota Automobiles how cheap and durable when they entered the system till production started in Nations with Higher Inflation rates like the United States.
There are various factors that Inflicts Inflation in a nation’s economy and devalues the native currency, they all boil down to financial decisions taken by political heads at a particular point in time either by been conned, fooled and or forced by some more powerful Authorities. Also too, sometimes for personal interest.
Inflation is contagious, when a nation suffering from Inflation sells goods and services to another nation, the nation buying that commodity share in the Inflation burden of the affected nation.
There are a list of factors I have realized by my findings that causes the rise of Inflation, some other realizations and findings have also been dispensed by economists and experts but these are my personal findings.
# Sponsoring War and Using the Money as a Weapon
In human History, we have seen records of nations that interest in waging wars, how the economy suffers as businesses can’t afford taxes that they have to shutdown as in in Hannibal’s Case against Rome, in France during Napoleon Bonaparte's Invasion Campaign of Russia which caused French Revolution against Napoleon, in Germany after losing World War I and many more. Though a few succeeded, it became a disease in the system that caused her collapse from within as records show in Greece, Rome and the Ottoman Empire to site a few, some of these nations came into the European Union with debt, apart from UK that never stop her local production of goods and services making herself a Market hub till this day, Germany and France that have experienced Inflation in their economy when they sponsored war learned it the hard way and turned back to the old ways of improving an economy by itself within herself.
When a nation sponsors war, all there is that should be used for Agricultural and Technology in Developing Humanitarian Investments are diverted into the art of making War Machines and Equipment. The copper to be used for Electronic Appliances are used for Bullets ranging from Pistols to Cannon Shells, this causes the spike in price for Electronics and copper made products as the price of a recently produced laptop will tell you today. Steel that should be used to Build Agricultural Equipment, Building Materials and Service Tools and Appliances are used to build War Equipment and Accessories. As all these unfolds, the focus on making quality products for everyday living dwindles, more taxes are laid on businesses producing humane usable materials causing an increase in price of these commodities. Since the businesses have no other place to lay the tax burden on other than their products or services for consumers to purchase.
The War in Ukraine ongoing have caused Food and Energy prices to Inflate by a tremendous rate as Russia and Ukraine who are food and energy suppliers to some nations can’t release their products to those in need of it or cultivate fresh ones, this have caused the spike in price over the available products.
The US and Europe used the US Dollar against Russia that all assets belonging to Russian Oligarchs was frozen in the United Kingdom and sanctions was laid on her by Intercepting every US Dollar Transactions happening between her and any nation using SWIFT (Society for Worldwide Interbank Financial Telecommunication ) as the platform to enact this restrictions (Sanction) causing a sudden shutdown of revenue inflow to disrupt any success of Russia in Humiliating and Oppressing the Sovereignty of Ukraine, this move caused some nations to start making alternatives to prevent such blows to happen to them. This now is among the causative agents of Inflation in the United States and some other nations having US Dollars as National Reserve Currency or International Transaction Currency.
The shortage of Energy Oil ( Crude Oil ) from their major supplier due to Political Decisions (Political War) that caused the mishaps, cut of supply chain from China due to Supremacy Struggle (Financial Market War) over the World’s Market Economy. The US Dollar Native Nation now lack the capacity to produce goods and services for herself lest of enough to sell out to her customers, with excess printed money in circulation as some nations release US Dollars from their National Reserve and seeking for alternative currency to handle International Transactions, before now the US Dollar has been the only approved currency. All that have been made ready by the US Dollar Native Nation for sales to other nations are products and instruments of war. As nations start releasing US Dollars from their National Reserve in exchange for other currencies so much US Dollar floods the US Economy, these are some of the reasons why the world is plunging downward as US Dollar has been the National Reserve Currency and International Transactions Currency used Globally. World production hubs like China and Russia are abandoning the US Dollar for something else causing an excess of US Dollar in circulation causing reduced participants in her usage(Reduced Purchasing Power).
# DEBT Infused Into the System Where Only the Interest is Been Paid Without Clearing Off the Borrowed Funds.
Granting loans and giving aids to countries is a good thing but it is one major factor of Inflation crippling and destroying the purchasing power of a nation’s currency value by receiving such loans and aids. As more money is printed into the system, it causes a rise in demand of goods and services due to more money in circulation, so inflation surges. The nations do not produce anything to enable the money circulate instead they purchase everything that they need causing the value of the money to depreciate more because the loan and grants is used to purchase foreign goods and services making her money circulation stagnant but circulates the currency of the other economy buying from. Also sharing in the Inflation of the country been bought from via the Foreign Selling Nations Tax in Production and Delivery Cost while the receiving nation suffers from Double Inflation, the Inflation of the excess money in circulation by the grants and loans, and the Inflation received from Exporting Nations Commodity Taxes, Supply Chain Add-ups and Miscellaneous Cost. These Loans are never repaid only the interests are paid till they are cleared away by the lending nations making things even more difficult for the borrowing nations as the inflation achieved via the borrowed fund is never taken away from the system which makes the borrowing nations currency value falls never to rise again causing the Inflation and economic value of the nation always dwindling, defaulting to falling down like a fallen star all the time till the money is so worthless and they call for currency re-evaluation which causes more debt, more money to be printed (Fresh Money Printed Atop the Old Debt), more Interest to be paid without systematically paying off the debt as repayment of the debt is discouraged leaving only the interest to be paid on a continuous and constant bases.
This kind of interest is an indirect tax upon an economy, pulling away the Profit which is the result of every Transaction Cycle that the Indigenous Currency Achieves, this invariably is also the Value the currency accumulates to effect it’s growth in value in International Evaluation which means the strength and power of the currency is in a subtle and systemic way drained away causing a spike in commodities as every form of profit is taken away via interest and most cases causing the Governing Council to impose more tax into the economy.
Despite this, some powerful nations that have granted loan to build infrastructure in the borrowing nations are about to seize the infrastructures as to what China is doing to Zambia, Greece and some other African Countries as record shows, enslaving a nation due to debt incurred. Just what loan causes.
# FOREIGN INVESTORS ( Taking Profits Out Of The System to Foreign Nations.
The frequency at which a particular money changes hands in settling transactions over a specified period of time determines the strength of the money(Purchasing Power) which invariably determines the value of the money which also correlate with Inflation. For inflation to be checked and placed under control, every economy must strive to produce local products that are needed for human consumption in solving matters arising from day to day activities of running the economy.
Foreign Investors play a major role in improving or destroying an economy, when foreign investors come into the system, they come with money which is a good thing to a degree, this money causes the printing of more local currency, this influx of money causes a spike in price of commodities. The profits achieved from these transactions by the foreign investors are taken out of the economy stopping the circulation of the currency on the profit, thereby causing the volume of money in circulation to be there but reduces the frequency at which the money changes hands as some of the profits has been out of the system into another economy, that is, a different currency ( When a particular money’s Transaction Frequency is high, the value of the currency appreciates, the accumulated profit systematically appreciates the volume of money and if this profit does not cause the printing of more money it infuses itself into the total printed money in circulation there by increasing the purchasing power ( Money Value) of that currency in question).
When Foreign Investors come into an economy, the Profits they achieve in the transaction is taken away to their economy which means they come to take the market resources away as what showcased itself between India and the United Kingdom that caused Mahatma Gandhi of India to take a decisive stand in improving India’s economy in an Indigenous way and Non Violently. This notion today have taken India into greater heights as they continue to respect, produce and purchase local products that have now spawned into international products.
# Inflation is Contagious
Inflation is contagious, Transaction Borne. When an economy with low or controlled inflation rate carryout business transactions in buying products from a high Inflation economy, the economy with the controlled inflation rate share Inflation with the High Inflation rate Economy, this happens as the controlled inflation rate economy pay for the commodity from the High Inflation Rate with all expenses inclusive.
Right now the United States is undergoing Inflation due to Nations dumping her currency for an Alternative in settling International Transactions and as a Reserve Currency causing so high an amount of money in circulation in the US Economy, This high surge of US Dollar into the US economy have caused a rise in Inflation, as the US Dollar transaction frequency rate diminishes, inflation surges, this automatically affects other economies that use the US Dollar as National Reserve Currency, Backing Financial Institutions or Carrying out International Transactions.
As Ukraine Russia war is ongoing, Inflation increased in nations buying from Ukraine and Russia due to shortage in supply chain and high demand of commodity which increases the price of a commodity thereby causing a drop in the purchasing power of the country’s currencies buying from Ukraine and Russia.
# Bailing Banks and Financial Institutions by Printing Money into the System from Thing Air.
Printing money into the system to make up for some activities is good as it improves the economic standard but printing money to bail out banks and Financial Institutions because they made wrong decisions that caused prices of goods and services to inflate until it came crashing is a wrong thing, these Market Manipulation Strategies are the creators of Inflation, they use Inflation to initiate growth.
When you print more money into the system, as did happen during the COVID Pandemic it puts more money into the system to purchase the little goods kept in reserve for a higher price, not that the money bought the same commodity for the same quantity at the same price it was before the pandemic but at an inflated price which cause the purchasing power of the currency to drop as more money is needed to purchase the limited amount of goods and services. what the people need is not just the money alone per say, they also need the products to buy at the usual price. If every nation can produce goods for themselves and others, raw materials for other products will be made available at lower cost.
# Food Production for Self Sustainability
Food is such an essential commodity in the development of an Individual, a Family, and a Nation at large, with hunger or high price on food, everyone thinks about how to set food on the table on a constant bases. When an individual or a family have food in abundance, the children of that house do not worry about what they will eat when they get hungry, as parents are also supportive, they will be focusing and pursuing their aspirations of greatness which means providing and building solutions for humanity’s usability and putting Inflation on check.
When the Pandemic struck, many nations were exposed to sudden shortage of food as supply chain of their food products was affected, this causes the price of food commodities to increase.
When a nation can’t produce food locally for her citizens to buy without external influence, the country automatically suffers. If the food comes from another country, the buying Individual (Nation) have to pay for the taxes of the producing nation covering the commodity been purchased, also too, pay for every expenses and imputed profit through every hand that the commodity changes hands with during transaction alongside the cost acquired on the commodity due to supply chain and other taxes and fees needed to deliver the product to him. For example, right now I reside in Accra Ghana West Africa, where 5 Kilo of Royal Aroma Rice is around 91.00 GHS per bag. This rice comes from Vietnam, before I can purchase the rice over the counter, I will first pay the taxes covering rice processing companies in Vietnam along with the added money from profit from the company, after that I have to pay for the Shipment cost to deliver the rice to Ghana, then comes Ghana’s Custom Duty in clearing the rice along with charges to offload the rice, then comes the buyer who goes to buy in whole sale from the shipper, him also adding his profits, then comes the one whom I buy retail from which also include her transport, profits and other miscellaneous added, all these add up to the cost of the 5 Kilos of Rice I purchased over the counter. Mostly, I love to cook my food myself.
Another form of inflation in Food Production in a country, is when they can’t afford to cultivate Agricultural Products to care for their need, then Foreign investors come into the country to manage these Agricultural Products Production and Processing. First these foreign investors have to spend huge some of money to get established due to governmental requirements, taxes from government also get added, extra profits also get added as the foreign investor have to try the best possible way to achieve the money invested in initial expenses or startup in the business in the best possible shortest time-frame. In some cases where the foreign investors want to play a market strategy to monopolize the market, they initiate a game to discourage local food production, they come into the system and buy up the unprocessed just harvested products by locals, process it and sell them with a costlier price or very near in price to the foreign one which is nicely packaged, this act discourages consumers from patronizing local products and opt for the well packaged and presentable one that is imported, this way inflicting more blow to the economy by making the local product more expensive and been discarded with time.
When food can be produced with low cost on a constant bases by a nation for herself and others other goods and services will be produced with lower cost with better quality.
# Conclusively
The one way to solve the Inflation crisis in a nation to stabilize the economy is to respect, value and purchase local products produced by locals, this way you can get a cheaper food and clothing, without so much taxes imposed on it. Mahatma Gandhi of India proved it when he initiated the locals into picking up their local way of processing salt which have become a criminal offense in India to process or purchase locally produced salt that is not from British Approval, though he did not really experience the beauty of what he initiated, today India have risen back into the International Scene by initiating his idea to Love Respect Cherish and Value Local Products and their Culture as a people, only when a Man or Nation can produce for themselves and others can an economy really Control and Contain inflation.
All of man’s activities is geared towards taking advantage of how to make quick and easy cash which makes good use of the Economic Growth Strategy infringed via Inflation, it is made difficult for those who want to build from the grass root without inflation causing agents listed above to suffer losses as regulations is always against them.
Though the world will never back down from sponsoring Debt and Inflation to enable growth and the world Financial System will always go at extreme to collapse the economy due to decisions taken for reasons of control as there is no stated calibrated rules as to when regulations have to be adjusted, the world will never back down from activities that causes goods and services inflating over time like investing in wars (Open, Cold or Secret) to thwart the success of those going the other route of self sustainability to achieve their intended goal. What we all need to to do is wake up and produce something that is worth purchasing for the greater good of humanity within our community to up-build, improve and enhance humanity’s existence.
Let’s make the world a better place to live in by practicing acts that will improve livelihood instead of destroying it.
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