Understanding inflation on a day-to-day basis - Part One

in hive-175254 •  last month 

Before I extend to explain what I want to explain, I must clarify that I am not an expert in finance or economics, but as a thinker I can reach certain conclusions, and from the reality that I observe daily I can permanently realize that the economy is very bad.

It is not a lie to anyone that the dollar in many countries continues to rise in value, although many say that this currency is already in decline, is still the main currency in the world, is used as a reference for most calculations of wages for example, and most of the products we consume.


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It also gives us an idea of the evolution of this and how it reflects the degree of inflation in the different countries. I will talk specifically about two countries, which I know because in one I was born and in the other I currently reside, Venezuela and Colombia respectively. In this first part I will talk about part of what happens in the land where I was born, and in the next post, the second part, I will explain how I perceive inflation in the country to which I emigrated.

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I'll start with Venezuela, my beautiful country, which has gone from being known worldwide as the country with the largest oil reserves in the world to being a country where a group of politicians have been in charge of leading it into an economic debacle without precedent in the history of the world economy. More than 1 million % of inflation in the last 10 years...

Well, I emigrated from Venezuela two and a half years ago, already the reality was catastrophic, but at this very moment it is ten times worse. To make it easy to understand; The minimum wage is 400,000 bolivars (VES) Venezuelan national currency, and to that is added a food allowance of the same 400,000 VES, that means that a full salary, as it is called, reaches 800,000 bolivars, you would think that there are a few zeros in that figure and something must be worth, well, a dollar in Venezuela is worth 200,000 VES, that is to say that the minimum wage is 4 dollars a month, if, please shut your mouth, it is surprising and it seems exaggerated, but it is like that. .. 4 dollars a month.

And the price of the dollar keeps going up, daily, so soon almost any income will be reduced to nothing...

Logically you can think and be right that when the price of the dollar increases all products and services go up in price, so after a few weeks what you could buy with 10 dollars now you need to buy the same about 15-20 dollars . Well, I am not an expert in this area but I think this is easy to perceive without being a scholar in the subject, don't you think so?

Well, in this case it is a limit situation, in it they have made a series of eliminations of zeros of the currency, that is to say, that before it was worth 1000 bolivars, now it is worth 1, but all increase, and they removed 3 zeros more, so again what was worth 1000 (and before 1000,000) now is worth 1... yes, absurd but true. That's a good way to bring a country to ruin, and with little effort.

That of managing, of governing cannot be assumed by people who do not know about finance or economy, much less those who lack common sense. But they are the ones who are...

See you in the next publication in which I intend to make a comparison between the economy of my home country and the country where I currently reside.

Have you ever lived in your country or nearby countries similar situations to the ones I am raising?
Can you live in your country with 4 dollars a month?

Thank you very much for reading me.

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I can’t imagine living on $4 per month, at least not in Texas. I do remember when Mexico had to remove zeros from their currency. They went from pesos to nuevos pesos.

Posted Using LeoFinance

Yeah, it's impossible to imagine. But it's a reality, unfortunately.
Things tend to get more complex.

I got a taste of this. USSR. And it's crash 30 years ago...

Posted Using LeoFinance

USSR... I think for some reason it ceased to exist, it just didn't work.

I think that if you knew that reality you can understand what it is like in Venezuela. I hope you are currently very well.

Thank you @onealfa.leo

It is a difficult situation that we have been over 20 years trying to overcome and sure Those who do not live in Venezuela will not understand, oeto it's really hard to beat here we are doing our best to fight and continue in good spirits, between internet failures, ridiculously low power prices elevated by things and goods

Difficult @reinaldoverdu
My mother is still in Venezuela, and my grandmother, I am aware of this because I have spent days without communicating with her due to lack of electricity, or internet, among many other things.
I understand, it's chaos.
I don't know until

@josevas217 in short i want to say inflation will not be over , but we need to make changes in your daily life to over come the inflation. like we can change our spending pattern and savings.

hi @adityajainxds

That's true, the point is that inflation in such an abrupt way often does not allow for financial adjustments to be made as the inflationary process unfolds. Example:

When I was in Venezuela, because I was born there, I practiced my profession, I am a doctor, and I had a fixed salary, which was increased once or twice a year. Now, the prices of products were increasing daily.
If with my salary in January I bought food for three weeks, the same salary in February allowed me to buy food for only two weeks. And so it went. Until I had to work three jobs, to be able to eat the month. Or half eat, because I couldn't really eat well.
And it's important to note that I don't smoke, I don't drink liquor, I don't go to parties, I don't go to discos. I'm thrifty, but when inflation is so rapid it's hard to maintain a savings pattern... difficult.

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you mean you keeping earning how much ever bolivars it's worthless!!

I am afraid this situation may be in for India too...once Dollar crisis sets in...you know what I mean.

The rich ironically get effected.

Sad for Venezuleans... so much suffering these days can't help but feel a bit fortunate but even then what a horrible world this is becoming to live and survive!!

Shudders!!

You have explained the concept of currency inflation really beautifully, btw!!

Thanks for your comment @mintylile
Yeah, I know what you mean about the dollar crisis...
It's up to us to prepare for more difficult times, surely

Wow, inflation is not something meant for day to day analysis. Gas prices have always irked me.

It seems that no friend, but, I tell you that in Venezuela there are products that are available in the morning at a price, in the afternoon is already another, higher of course.
It's total madness.