When inflation hits highest in 20 years!

When inflation hits highest in 20 years!

Everytime our favourite noodle increases in price, we usually would accept it (or some of us may decide to switch to another shop) and continue going back because we know the price was raised because of inflation. By the way, increasing price does not necessarily because of inflation all the time. Inflation happens because the demand is more than the available supply and thus prices increase to balance the demand and supply.

Theoretically, when prices go up high enough, the demand will reduce and if supply is more than the demand, then the prices are supposed to drop as well. It does not usually happen though. Prices, once they are up there will usually stay there and wait a while before moving up further. Ask ourselves. If we bought a property, would we sell it lower even when people kept saying that there’s an overhang property market today?

Just in case you like to know, the inflation surged to highest in the US over the last 40 years as well. As reported in the media. Read it hereUS inflation surges to near-40 year high, testing Biden

Article in nst.com.my Michelle Marquardt of the Australian Bureau of Statistics said this about Australia’s inflation rate. “The CPI recorded its largest quarterly and annual rises since the introduction of the goods and services tax.”

Australia’s annual inflation rate hit 5.1 per cent in the March quarter, the highest recorded since 2001 as per official data. The rising cost of living has been a key issue in the election campaign and the conservative Liberal government Wednesday handing a one-off Aus$250 payment to millions of Australians.

Unaffordable housing has become a hotly debated subject in Australia, with mean house prices hitting Aus$920,000 — and Aus$1.2 million in the most populous state of New South Wales — according to the statistics bureau. Please do read the full article here: Article in nst.com.my

Yes, even Malaysia may have a rate increase to stem inflation

Here’s that earlier article: Interest rates will rise in H2 2022. Let’s be ready and be happy too. When inflation is high, central banks will increase the interest rates with the hope that more people will put the money in bank instead of using it. Plus the fact that when interest rate goes higher, people have less incentive to buy a property or a car because the repayment will be higher when the interest rate is higher. When demand for goods and services go lower, then the supplier will be willing to reduce the price and this is how inflation can be stopped from going higher even if interest rate alone may not push down prices.

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