6 Things about Inflation

By: Zach Johnston and Chase Martin

1. What is Inflation?

Inflation is a rise in prices causing prices to go up. What causes inflation though is that the demand is greater than the supply causing the price for that product to go up. The printing of more money in the market can cause the currency to go down and has been a trend in history.

2. Money Wears Out

Money has a shorter lifespan than a human. Due to inflation a $1 has an average span of 21 months because it is used more often than bigger bills, $100 can last for 7 years because it is used less often. This gives you a reason to spend your money quicker.

3. Did Inflation Cause WW2?

After World War 1, one of the best examples of devaluation and inflation occurred in 1924 to Germany. The German's lost WW1 and forced to pay for all the damages to the Allies but this did more damage to their own country to pay for the debts they printed more money which caused there currency to be devalued. This made Germany weak and could be the reason for Hitler to come to power so easy.

4. The Fall of the Roman Empire.

The fall of the Roman Empire was big cause to inflation after Caesar. Rome was war torn and steadily expanding gaining money as they went this caused the market to be saturated with too much money causing the devaluation of the Roman coin. The funny thing is they actually tried to destroy the coins.

5. The Worst Case of Inflation.

The worst case of inflation happened in Hungary in 1946 causing prices to double over night. It got so bad that people were going to the grocery store with one hundred quintillion péngo dollars. By the end of that year they changed the currency with the forint but to put it in perspective 1 U.S. dollar was equal to 1,000 péngos.

6. Metals never lose value

During hyperinflation metals never lose there value. They don't lose it because it takes time to produce and most metal are scarce. Instead of dollar bills which are created a value can be change metals always stay stable.