Effects of Inflation | Stealing from you Covertly

#economics #inflation #money

Inflation leads to the business cycle, without a doubt. However, it can do something much more sinister, completely obliterate the currency. The business cycle will be set into motion, but continued inflation will lead to a currency breakdown. The purchasing power will continue to fall until the point it’s worthless, and no longer acceptable as a medium of exchange. Inflation can be beneficial in the short run, but not in the long run.

Purchases are made to get rid of the notes on hand. The notes will be used to purchase something that will do a better job of holding its value. People will buy unnecessary commodities if they expect the inflation will not come to an end. The increase in purchases will give the appearance of a healthy economy, but this is just the crack up boom. This is certainly not a healthy and sustainable economy.

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