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What is inflation?

Inflation is an economic phenomenon that occurs in the economy of countries, in which the prices of goods and services that are marketed in each nation increase without control. In other words, inflation is equivalent to a loss in value of a country's currency. The higher the inflation, the less value money has, so we have enough to buy fewer things than before the inflationary increase.

Who is affected by an increase in inflation?

Inflation affects us all. It doesn't matter if you are a employee, producer, investor, entrepreneur. Even if you have your money saved in a bank, it could lose its purchasing value as inflation increases.

What causes inflation?

As we already mentioned, inflation is caused by the uncontrolled increase in the prices of products and services, which can be affected by different factors:

  • Variation in the prices of products on the international market (For example, rice, wheat, corn, oil, etc.).

  • Decisions of the government of each country (For example, when the government raises the prices of government procedures, fuel, public transport, water, electricity and other products and services).

  • Natural and climatological phenomena (For example, when some agricultural products are affected by droughts, floods or fires).

  • Events caused by foreign policy (For example, when a war breaks out between two nations, and the costs of goods and services related to these rise).

What are the countries that have suffered the most inflation in the world?

These are the projected inflation data for 2022:

  • Venezuela (500%): Venezuela has been among the first places of inflation for years. It is estimated that 94% of the population lives in poverty.

  • Zimbabwe (86.7%): Inflation in Zimbabwe is due to economic sanctions that have aggravated the crisis they were already suffering. In addition, since the beginning of the war between Russia and Ukraine, inflation took a great increase.

  • Turkey (60.5%): Turkey is experiencing its highest inflation in 24 years, also suffering the impact of the war in Ukraine, as well as economic sanctions.

  • Yemen (59.7%): The 7 years of war in Yemen have raised inflation considerably, to the point that the government's ability to provide basic services to the population is being questioned.

  • Argentina (51.7%): The war in Russia and Ukraine raised inflation in Argentina to around 5% per month, which markedly increased energy and food prices.

When a country goes through hyperinflation, its currency devalues ​​considerably. Hence, the paper on which it is printed is often more valuable than the face value of the banknote. Governments with hyperinflation issue paper money of very high denominations, many of them in millions, billions and trillions of units. Many people seek these banknotes to collect and exchange them. We invite you to see our catalog of banknotes from different countries and denominations by clicking HERE.

#IRVEAntiques #Banknotes #Inflation

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