Inflation is a steady rise in prices, owing to which, incomes and savings of the population will depreciate. Even the weakest inflation is dangerous for the development of the modern monetary economy. Therefore, all countries (including the most developed ones), take anti-inflationary measures to reduce inflation rates.

What causes?

Inflation - a monetary phenomenon associated with issuance of excessive money for circulation compared with the supply of goods. This increase in money occurs for various reasons. And the first of them is the growth of incomes of the population, not supported by a corresponding increase in the production of goods. This excessive demand pushes up prices and increases inflation rate. This imbalance between supply and demand for goods and services can also be resulted by crop failures, import restrictions, or actions of the monopolists. Also, rising costs of the production and increasing expenses of enterprises for wages, taxes, interest payments and others highly contributes to increase of inflation rates. Furthermore, the increase in prices for imported components shows both an increase in world prices and weakening of the national currency. The weakened national currency can directly affect the prices of the final products imported from abroad. The overall effect of exchange rate changes on price dynamics is called the "transfer effect" and is often viewed as a separate inflation factor. An essential role in the development of the inflationary process is played by the so-called waiting moments. The expected rise in prices forces the population to buy goods. Thus, a deficit is created for some of them, and, consequently, prices are rising. It is difficult to bring down such inflationary expectations.

Inflation can take many forms. In a regulated economy (such existed in the USSR), as well as in wartime conditions, when prices are fixed, it can have a hidden character - this is so-called suppressed inflation. It is followed by the deficit of many products, a surge in shadow trade, a sharp increase in prices in the markets, etc. However, the repudiation of such regulation (after the war or in countries that have passed from an administratively regulated to a market economy) often generates "galloping inflation" with a frenzied price increase. It arises from the discrepancy between the supply of money and the insufficient quantity of goods.
The other forms of inflation include:

- Administrative inflation - the inflation generated by "administratively" operated prices;

- Galloping inflation - inflation in the form of spasmodic increase in prices;

- Hyperinflation - inflation with very high growth rate of the prices;

- Built- in inflation - characterized by the average level for a certain period of time;

- Imported inflation - the inflation caused by influence of external factors, for example excessive inflow to the country of foreign currency and increase in import prices;

-Induced inflation - the inflation caused by influence of factors of the economic nature, external factors;

- Credit inflation - the inflation caused by excessive credit expansion;

- Unforeseen inflation - the rate of inflation which has appeared above expected for a certain period;

- Expected inflation - the estimated rate of inflation in future period owing to action of factors of the current period;

- Open inflation - inflation due to increase in prices of consumer goods and production resources;

Negative Consequences of High Inflation

High inflation rate decreases purchasing power of all economic entities which negatively affects demand, the economic growth, the standards of living of the population, and moods in society. Depreciation of the income narrows opportunities and undermines incentives to saving that interferes with formation of a steady financial basis for investment. Besides, high inflation is accompanied by the increased uncertainty which complicates decision-making of economic entities. Overall inflation negatively influences savings, consumption, production, investments and general conditions for sustainable development of economy.

How to decrease?

Fighting inflation, as the experience of developed countries shows, is extremely difficult. It seems easy: freezing prices or introduce some form of regulation for prices. Unfortunately, this method is effective for a short time only. The freezing of prices will soon be triggered by an increase in the deficit of goods and will further exacerbate inflation. The other method of fighting inflation is through contractionary monetary policy. The aim of this policy is to reduce the money supply within an economy by increasing interest rates. This helps to reduce spending because those who have money want to keep it and save it, instead of spending it. It also means less available credit, which also reduces spending.

SalBut 11:35 AM Admin Bandung Indonesia

Defining Inflation

Getting a Fix and Flip Loan

A fix and flip loan is a great way to get financing if you're just starting out in the housing industry. Buying a home, renovating it, updating it, and then putting it back on the market is a great way to make a living or to earn extra cash. However, if it's your first time, you may not have the seed money that you will need to get started. Here are some things to know if you need a boost to get into this industry.

Turnaround

Keep in mind that the turnaround in most of these cases is less than a year. That makes getting a flip and fix loan from a traditional bank almost impossible. Banks make their money from the interest accrued from long-term financing agreements. They don't like having the borrowed amount paid off within a year. To get this type of funding, you'll have to look for a lender who will agree to a short-term deal.

Different Reasons For Getting Personal Loans Today

Personal loans are being accommodated by banks and other lending institutions. Although they have various processes when it comes to approving these loans, they are very much knowledgeable about the common purposes why most people obtain such services.

Different Loan Purposes

For their children's education - Most people are aware that tuition is not cheap. Apart from tuition, there are miscellaneous expenses linked to sending your child in school. These days, plenty of people are struggling with budgeting so they can efficiently accommodate the huge cost of tuition.

Learn More About Personal Loans!

A personal loan is a type of loan that is opted by many consumers at one stage or the other. It is often used to cover various type of expenses and purchases. It can be to purchase a brand new car, a family getaway or to cover the expenses of a wedding. It is however mandatory that any person who is thinking of acquiring a personal loan be well informed and educated. It is important to take good decisions in order to avoid all the negative repercussions and consequences in future. There are various types of loans available in the present market and all these loans are designed specifically to meet various types of circumstances. It is thus important to understand how all these work.

A loan can be defined as a financial contract in which one particular party that is the lender agrees to give another party who is called a borrower a specific amount. This amount must obviously be paid back by the borrower on a monthly basis over a certain period of time. There can also be a lot of interest payments at an agreed rate and there can also be additional charges for proper administration of the loans. All the terms and conditions of a loan can vary from one lender to another lender.

Auto Title Loan - Your Car Is Your Treasure-House

Are you in need of cash? Have you exhausted all your options but unable to find a solution to your cash problems? Even financially stable families may get caught in financial crises. Prolonged illness, loss of a job or any other unforeseen event may compel you to look for quick financing options.

Bad Credit Car Loans Steadily Gaining Popularity Amidst Economic Stagnation

Personal loans are common across the society since the historic times. These can be broadly categorized as secured and unsecured personal loans. It is easier for everyone to avail unsecured personal loans as compared to the secured ones. The sum of money involved in this category of transactions is usually petite, ranging between hardly a few hundred dollars at the most. In order to avail the type of facility, a borrower, usually, does not need to put up any asset as collateral. As such, the individual's credit score is hardly taken into account while providing the facility. However, in some instances, lenders charge higher interest rates to borrowers with dismal credit scores, on availing unsecured personal loans.

On the other hand, to avail secured personal loans, borrowers need to put up some asset or the other as collateral. As such, rate of interest involved in this range of loans is usually more reasonable as compared to the other variety. Because of the collateral asset, lenders offer secured personal loans at lower interest rates. Thankfully, both the types of loan allow monthly installments to borrowers to repay the money. In a recent development, a range of registered money lending agencies is readily providing loan to people with bad credit. To avail the unique facility, however, one has to own the clear title of a car, truck, van or SUV. The amount of money disbursed as loan is determined by the condition of a vehicle in question.

Car Finance Tips for People With Bad Credit

If you want to buy a car, you may have realised that:

>> You have some bad credit as a result of some issues in the past that are listed in your credit file; and

>> Your local bank branch has determined that you are not eligible for a car loan.

Do not worry. You are still eligible for a car loan because lenders/credit providers do provide second chance to people with bad credit. However, you will need to:

>> Show the lender/credit provider that you have improved your credit history; and

>> Have a reasonable explanation for any defaults listed in your credit file.

When you have bad credit, you need to put in extra efforts and ensure the lender/credit provider of regular payments. Here are five important tips that you should consider and which may benefit you:

Factors To Consider Before Getting A Car Loan

Unless you will be paying full for the car you are considering of buying, you will surely need a car loan. However, with plenty of competing auto loan products in the market today, how will you choose the best? Well, experts have indeed provides some tips so you can get the best auto loan.

Things To Consider Before Making Your Final Choice

Interest rates for every car loan product - Basically, there are 2 types of interest rates applied for car loans. First is the fixed interest rate wherein rates are calculated every month depending on the total amount the client borrowed. Second is the reducing balance interest rate wherein rates are computed monthly basing it from the amount the client currently owes the bank. In some other banks, profit rate usually is computed by dividing the markup profit by the purchase cost.

You ever hear that saying "time is money"? It feels like I've personally heard it a thousand times from a thousand different people. Even though that phrase is overused and annoying sometimes, it doesn't mean that it isn't true. Another common phrase is "money makes the world go around". Of course money isn't the physical source that causes the earth to rotate on its axis, but it does play a part in everything humans do on this earth. Money can take many forms, be used for multiple purposes, and can dictate whether someone lives or dies in extreme cases. As much as we would love for everyone to be equal and on a level playing field, that world only exists in fantasy land. The truth is that people who don't have money want it, and people who do have it want more. The more you have, the more options become available to you.

Since I can remember I've had an interesting relationship with money and how I choose to use it. I was raised by a single mom, who worked extremely hard to make sure my sister and I had a roof over our heads, food to eat, and clothes on our backs. To say it plainly, I don't come from a lot. As an observant young kid I noticed that at a relatively early age. As a kid I got $100 from my grandma every birthday. Most kids would hit the mall, toy store, or any store that contained something they wanted because that money would burn a hole in their pocket. I on the other hand always waited. It wasn't that I didn't want toys, new clothes, or something shiny to impress the ladies with. I just knew that I felt better with the money in my pocket then spending it on something that I could only use, or wear at certain times. My goal was to save it and use it only for emergencies or until I found something that could help me in the long run.

The issue most consumers have is that many think for the moment. That video game is popular right now. This style of shoes is in right now. These are the same shades that so and so had on in his music video. Fast forward six months from now and who cares about any of that. The video game is old, the shoes are last season, and the shades are from a video of a song that no one can stand anymore. Why not think six months ahead before spending that money.

The trick is to imagine every transaction as an investment. Of course paying bills, buying groceries, and putting gas in one's car are essential. It's the non-essentials that one should concentrate on. Everything we do costs money, going to college, on vacation, to the gym. Time is really money. What you invest your time in dictates what results you get in life. Same rules should be applied with daily transactions. Every time you make a transaction, think about what payoffs and consequences buying that product or service will get you in the future. Steer away from the impulse buy and embrace the investment buy.

Newbie 9:36 AM Admin Bandung Indonesia

Spending Equals Investing

It continues to amaze me how many businesses don't want to create a budget. They would rather operate their business blindly than to create a profitable plan so they can prosper in the upcoming year.

Not having a budget can cost you a lot of time and money. Unnecessary time and money. So I am going to share with you five ways that a budget can save your business.

1. Creates structure

If you haven't learned by now, creating or starting a business is very similar to a building structure. You have to have a foundation which is your business plan. You have to erect the pillars that will hold up the ceiling. These are your principles and processes you plan to implement in your business. And you have to have the ceiling to help keep you covered. And this is your plan around the inflows and outflows of the money in your business. Your financial goals.

A budget helps keep you covered and protected from the uncertain elements of business by preventing you from spending beyond your financial means. It is THE financial tool needed to help you reach your goals. It is the guideline by which your business will be funded and operated.

2. Makes you aware of your numbers.

Having a budget forces you to monitor your numbers regularly. It puts you in tune with all of your sales as well as your costs associated with those sales, your marketing, your payroll, inventory, fixed assets and cash flow that is needed to keep the business going. Knowing your numbers allows you to make informed managerial decisions based on solid facts, not fabricated ones.

3. Holds you accountable

Your budget is your accountability partner. Because you are aware of your numbers, you are more inclined to monitor and track them on a consistent basis. Having them constantly in your face to ensure goals are met.

4. Positions you for growth

A budget is a numerical and visual representation of your desired goals within your business. When you create your mission or your vision, you have a clear cut idea of where you want your business to go. What the budget does is help you plan out the strategy around what ideas you will implement to meet those goals and how you are going to execute those ideas. This representation displays your expected results and if monitored consistently, allows you to make course adjustments as needed to still hit your desired goal.

5. Saves you money.

As I said earlier, having a budget forces you to monitor your numbers regularly. Because you have this financial plan in place, you are more inclined to ensure that you do not go above and beyond your expected spend. You are in a better position to see where there are costs that can be eliminated or reduced.

Newbie 10:49 AM Admin Bandung Indonesia

BLOG FINANCE