Hey,
Ever heard from the older
generation hawker would say
"Last time we sell this 50 cents
only"
"Now we sell $3.50, but we give
a little bit more (ingredient) la, ya."
"Now everything more
expensive"
Or even when our parents would
say one ice ball would cost only a few cents back in the 60s 70s, but now ice kachang cost $3.50.
But why would things that are
similar have a big price difference?
This is because of
….
Inflation.
A simple way of understanding
inflation is the rise in cost in goods and services.
From the year 1962 till 2021,
Singapore averaged out to have an increase of 2.50% in inflation rate annually.
Inflation is caused by ‘supply
& demand’, a country's growth, rate of printing money and many other factors.
When a indemand supply is
limited, the price would go up, and the opposite for less in demand products
When a country's economy is
improved it directly influences people’s purchasing power, higher wages resulting in country’s growth.
When the rate of producing money
is faster than it’s able to digest, it causes huge influx of dollars in the marketplace, bringing down the true value of money, decreasing your purchasing power
Which in turn causes
inflation.
And when things go OFF
CHART,
It’s called
Hyperinflation.
Which makes the value of money
become value-less due to an accelerated inflation in a short period of time.
If (touch wood) singapore is to
experience hyperinflation, a regular McSpicy meal would cost $15 or more instead of the normal $7 you have now.
When it hits every single part
of our life, water bills, electricity bills, internet, transport, and so on….
Our purchasing power declines,
Singapore dollar value decreases and eventually causes a ripple effect on unemployment, tax revenue, company closure and so much more.
Over the period of 1950s to
2010s well-known hyperinflation episodes occurred in Germany, Venezuela, Zimbabwe, Hungary, Yugoslavia, Greece, and many more.
Touch wood, Hyperinflation will
not come to singapore,
But moderate inflation growth is
actually good for a country’s long term growth.
What do you
think?
Hit the reply button with your
thoughts.
I'll be reading your emails and
get to bounce off ideas with you too.
Lotsalove,
.
.
.
Much love,
