Inflation is the decline of purchasing power of a given currency over time.
The rise in the general level of prices means that a unit of currency effectively buys less than it did in prior periods.
For explaining in simple way the inflation, let’s consider how the price of a cup of coffe has been rising overtime
Of course the value of inflation changes depending on the method used for measuring it. Central Banks and Governments often “changes” (or better “manipulate”) the way to calculate inflation.
Since 10 years the rate of inflation in developed countries is “officially” proximal to Zero, according to the Central Banks.
But what if the real inflation were higher and the data manipulated?
What if we calculated the inflation with the criteria adopted in ’90? or in in ’80?
What if we discovered that the real inflation has been between 5% and 10% per year during the last decade?
Our real-world experience tells us the official inflation rate doesn’t reflect the actual cost increases of everything from burritos to healthcare.
Our money is losing its purchasing power much faster than the government would like us to believe.
Central States are only able to sustain their enormous deficit spending because interest rates and bond yields are near-zero or even below zero.
All the burden has been shifted to the consumers, who pay an invisible tax (inflation).