Inflation and Absolute Power

Over the years, the government has fully controlled the currency and its development. If the government can control all funds while excluding trade mediators, we think that it is easier to acquire financial assets, so we want to gain control. As the population continues to increase, the government has figured out ways to spoof funds to meet funding needs. This counterfeit currency caused inflation. Inflation occurs when more and more money is generated, which reduces the value of each individual dollar.

Purchasing power parity (PPP) focuses on inflation in the exchange rate relationship. PPP has two types, absolute purchasing power parity and relative purchasing power parity. Absolute purchasing power parity The exchange rate between the currencies of both countries is equal to the price ratio of both countries, for example, if the price of product A of a country is X, the price of country B must also be the same. This is another exchange rate where the value of money is constantly changing and constant all the time. The currency that uses this exchange is called the variable currency. Not all countries use this exchange rate because of currency instability and the fact that inflation is too high.

There is a negative correlation between the inflation rate of the US and Argentina and the exchange rate. As the country's inflation rate rises, the bargaining power of the currencies of other countries also increases, resulting in the depreciation of the country's currency. In this case, the US is a country where inflation is expanding, strengthening and stabilizing the currency of Argentina (one of the biggest trading partners). Compared to Argentina, the inflation rate in the U.S is rising by an average of two or more price indices a year. It is the first time that the inflation rate of the United States declined by about 0.5% in 1997. Since then, the exchange rate between the Argentine peso and the US dollar remained at 9,995 pesos / dollar in 3 years.

Inflation is a general rise in the price of goods and services, eroding the value of dollars and purchasing power of wallets and bank accounts. The inflation rate is the inflation rate for 12 months. The 1% increase in the consumer price index in 2017 means that the dollar at the beginning of 2018 at the beginning of 2017 was only 97.9 cents. Mr. Wendy also said that the price hike would offset the rise in hourly wage. Wages are a large commercial cost, and as inflation increases it may lead to inflation. With rising state and local minimum wages, recent wages are rising and employers have to pay more to maintain and attract high quality workers because of the low unemployment rate.