How inflation works | CNBC Explains

Ever wondered how your grandparents bought a house with what would barely be enough to buy a used car today? The prices for things are constantly going up, and the main reason is inflation.
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[@DonaldMark-ne7se]

Our economy struggling with uncertainties, housing issues, foreclosures, global fluctuations, and pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.

[@Odmark-u5f]

I think it's not always about fear, Sometimes realistic factors discourage people from reaching their goals in life. For instance, I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value

[@PhilomenaCopple]

The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.

[@PitcockRoth-9876]

Please can you leave the info of your lnvestment advsor here? I’m in dire need for one.

[@PhilomenaCopple]

'Carol Vivian Constable, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.

[@PitcockRoth-9876]

She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.

[@user-3456rtu]

My wife and I, both in our 40s, married 14 years, 2 kids, only make 155K a year combined together. Only debt is the mortgage. We wouldn't know what to do with $400K a year. I'd like to see these people live on what we do. what could I do with this money to bring in more revenue for to cater for the kids?

[@322dawgg]

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[@Marthas-r4c]

Agreed, instead of panic or following a hearsay, I simply adopted the service of an advisor early 2020 amid covid-outbreak, and so far, I've attained my most measurable financial milestone of $650k after subsequent investments.

[@user-3456rtu]

nice! once you hit a big milestone, the next comes easier.. who is your advisor please, if you dont mind me asking?

[@Marthas-r4c]

I take guidance from a California-based wealth advisor 'Nicole Desiree Simon' you're most likely going to find her basic info on the internet, she's firmly established and well qualified.

[@user-3456rtu]

Curiously inputted her full name on my computer and searched online, found her site ranked top, very professional.. thanks for putting this out, it has rekindled the fire to my goal

[@mountainman6172]

I like this presenter's energy. Not vocal fry or monotone narration. Kept me engaged at the the topic at hand.

[@theTeflonDon1]

Kept you engaged in the lie.

[@qweds3127]

@@theTeflonDon1 What was the lie ?

[@theTeflonDon1]

@@qweds3127 Inflation is the expansion of the money supply. It's that simple. They gave a few explanations which were side effects of inflation, not inflation, and pretended they are quite confused and have lots of explanations for inflation. The blame lays solely on the fed and Wall Street who incentivises them. Failed to mention that at all, and also claimed Friedman was wrong.

[@lungantuthuko2583]

It's funny how the lady said that nobody wants to go back to the events of the 70's and 80's but we are, in the manner in which our economy is structured it's structured in a boom and bust way so in short history always repeats itself.

[@adnanhakoun7968]

whats so funny??? she is explaining inflation not telling a joke.

[@linnh7378]

I think she's making the interviewee feel comfortable for sharing. Why so serious

[@ranatuj1]

Well explained better than university lecturer.

[@aminozuur]

This was actually a great video. Very well explained.

[@Pedro-do-Canada]

8:25 that was kind of an overstatement because it left out one important detail: Brazil went through several currency changes in this period. In the 1980s, our currency was the Cruzeiro. It became the Real (the one we use to this day) in 1995. Still, great video!

[@eddieschneider1947]

Light bulb for her, but I am still in the dark.

[@VivekAnand-jq1pq]

Well explained

[@CNBCi]

Thank you!

[@clarestucki5151]

The original definition of the word 'inflation', from day-one of the science of Economics until sometime in the '60's, was "An increase in the ratio of the amount of money in circulation to the amount of goods and services in the marketplace (aka GDP), leading to higher prices." Somehow we allowed that definition to morph into simply being synonymous with "Rising Prices". Now it has again morphed into meaning only the rate at which prices are rising. Economists should never use the word 'inflation' standing alone. We should only speak of "monetary inflation" or "price inflation". That would clarify all the confusion.

[@vamshi5745]

In Starting a question posed remain unsolved... How our grandparents bought house.. We barely to buy a car? Answer please 🙄

[@hebrews11vs5]

The US made a mistake by going off the gold standard. It made the dollar actually worth something. My opinion at least.

[@kongr889]

IMHO, and on the contrary, I think that was a smart move looking back now. Money is a tool for all economic activities. Even if a country has lots of productivity, if there is insufficient "money" to facilitate the trading, the entire economy is held back! We wouldn't be at the best we could be. By breaking the money supply with the physical gold, our government can make money supply to better do its function as facilitator. Of course, another wisdom from past law-makers, is to delegate the money-supply regulating power to the federal-reserve-bank run by professionals, and not to the country's President nor members of Congress.

[@hebrews11vs5]

@@kongr889 you obviously understand economics better than me. I guess I just wish my dollars were worth something and my frustration is influencing my opinion. Hopefully you are right , that it was the right thing to do , to get off the gold standard.

[@kongr889]

@@hebrews11vs5 I appreciate your feeling. I have the same feeling as an individual. But, sometimes, what feels right for an individual, isn't the same for the collective goods for entire nation. Look at our gasoline price within US. The truth is, we have been enjoying the cheapest price amongst other countries. We take that for granted. But, that is our economic strength at work! And our strength was the collective results of many good economic decisions made by very wise people from the past. The wisdom that we rarely possess these days amongst our law makers who just refuse to work across party lines!

[@hebrews11vs5]

@@kongr889 I see. Thank you

[@007h13]

Usa: we already have 23 trilion debt Also USA banks: print more. Printer guy keyboard : 9999999999999999999 Printer : are you sure you want to print 9999999999999999999 Printer guy : who hoooo more plastic for idiots that eventually will come back to the rich stockpiling it and more needed to be printed and the circle never ends. Capitalism for the rich to get richer without a purpose not even paying taxes.

[@Mtaalas]

Next time, mute the mic of the interviewer when the interviewee speaks... i can't concentrate on the interviewee properly when she speaks over her...

[@pedroSilesia]

so true so annoying

[@nothingham4742]

The hosts reactions are annoying.....

[@pedroSilesia]

so true

[@linnh7378]

I think she's making the interviewee feel comfortable for sharing. Why so serious

[@juanpablohinestrosa7929]

100% agree

[@DyslexicAnaboko]

It was hard to understand what was being said over the laughing and confirming responses. Have to agree with this.

[@deepakjamra5502]

Thanks

[@proserialkill]

I've tried explaining inflation to many of my close friends and they still dont get the whole picture. This video sums it up way better than I could have ever said it myself.

[@jacklam6140]

Wow, Joumanna really did a great job explaining the relationship between the decrease of Money velocity and the increase in Money supply. Really easy to understand, great job

[@CNBCi]

We agree!

[@cheese5728]

Velocity doesn’t matter, what matters is if it is in circulation

[@garyoakham9723]

@@cheese5728 velocity matters otherwise the feds will keep printing more money to force people to spend

[@lorenzanaodip125]

Inflation is increasing money supply. Prices going up and down due to supply and demand is called free market. We have a lot of the first and little of the last.

[@biwack31]

I loved it. The lady is brilliant. Everything very well explained. She is really well spoken. Very eloquent. I hope to hear more of her in the future.

[@BoostaSauce]

Now has to be the explanation on what is inflation is, how works and most important, to understand when certain events happens in an economy you know what's the cause of it. Well done on this video❤🎉. You have my flowers 💐

[@TheBullOfLewisham]

Thank you. Inflation, is still hard to understand. Then you have the Bank's Base rate. Interest rates. All very confusing. 🤔

[@JuanPaOroz]

4:064 now we are seeing it lol

[@ChesterChanco]

You need to cut that annoying laugh part of this video tho

[@hish3843]

Thank you 🙏

[@dhrumilrathod2664]

4:25 WTF was that annoying laughter needs to remove it...

[@modizzle1]

Stonks

[@davidburcham7951]

Wow never seen such a stunning economist! Love the explanation of inflation especially the velocity of money/transactions!

[@bokamosolethabo5862]

NOBODY BECOMES A MILLIONAIRE OR A BILLIONAIRE BY WORKING FOR OTHERS AND DEPENDING ON THEM, GOOD INVESTMENT BRING MILLIONS OF DOLLARS, AND CONSISTENCY BRING BILLIONS, THE MARKET IS ALL ABOUT BTC AT THE MOMENT NOW.

[@welsonbratewhitez2462]

You're right sir,

[@welsonbratewhitez2462]

That is why I had to start forex trading 2months ago and now am making benefits from it.

[@welsonbratewhitez2462]

Thanks for introducing me to Mr Clinton .

[@welsonbratewhitez2462]

My first investment with Mr Clinton gave me profit of over $44,000 Us dollar

[@danielmarland8095]

@@welsonbratewhitez2462 O' Yes I'm a living testimony of Mr Clinton .

[@dinarachel7]

Same in Venezuela right now, money is used to make “crafts”.

[@ajdillion3021]

Milton was right

[@rhinejessyjose4463]

How perfect

[@mnyamande]

Jhb RSA at the intro 0:58

[@hakansepik6280]

Great video

[@hichamacemrar8273]

Hello

[@ekoi1995]

Why do Monetarists and Keynesians hate each in fact that they're two of the four known economic schools of thought along side the Austrians and the real business cycle that provide an understanding of stabilizing the economy? Are they really helping each other or are they just showing off their economic nerdiness and prove who's smarter than the other?

[@longshot8052]

the gold standard use to stop the inflation of printed cash due to only being able to print the amount the government had in storage, now due to fractional banking government's print money with no care, we need to go back to the gold standard and stop fractional banking

[@Zelergy]

What' with so much laughter? Not good.

[@FinancialAnalysisTJ]

Nominal GDP has grown despite the velocity of currency dropping. The money supply increased so much that it has actually kept price levels elevated. However, economies have yet to fully re-open. So yes, velocity has dropped, but I expect to see some mean reversion. Velocity of currency is extremely sensitive. The equation they’re referring to is M * V = P * Q. Money supply times velocity of it, equals price levels times the quantity of goods and services successfully transacted. It’s called the Quantity Theory of Money.

[@Lance_Thorpe_Esq.]

Inflation isn't the "main reason"..It's the definition of the rise in prices over a basket of goods and services.

[@kirilmihaylov1934]

The same

[@jamandcracks8875]

I can’t concentrate on what she’s saying. I’m too distracted by her beauty lol

[@quyenhong4727]

Some segments in the video are stamped not adjacent to each other

[@dymarnofficial7592]

Basically price will increase because of the scarcity raw material used to make goods and services 😒

[@divinefavour1289]

also inflation being an increase in money supply wasn't a milton friedman definition. that was what it was called before milton and keynes

[@jonidymeti5396]

Nobody: Me: **OPERATION WEIMAR REPUBLIC**

[@sli6422]

She is so beautiful that I didn’t pay attention to a word she said

[@slayterx7318]

LMAO .... Current Government- Let's print 20 TRILLION DOLLARS!!!!!! What could go wrong?" Maybe they should have watched this video.

[@Matowix]

It's a tax

[@thomasdarling2553]

Great explanation

[@samym3657]

I think i saw this girl at Bloomberg now right :D

[@marianachila5372]

Namp

[@marianachila5372]

Nap

[@TiMon-Experience]

Great video CNBC International Team!! These finance & economic concepts are so important in every individuals life. It helps people to learn & decide about the experiences they want in their life (comprising of health, wealth, enjoyment, lifestyle) & decide & take action on the same. It helps each one to achieve their goals. Great coverage of topics & areas; & help learn & spark interest in personal life (indirectly) instead of plainly pointing fingers on others!

[@skinnypeoples3650]

And you

[@neillamas8929]

The presenter's laughs at random times and her constant saying she understood so well made it tough to focus and was honestly a bit cringy

[@mstar8872]

And yet look where we are now. Said to be a worse recession than The Great Depression.

[@robertplatt1693]

The only thing that matters is the Treasury rate, and it is not going anywhere. This is because there are giant pools of cash with nowhere to go but savings. If US income distribution was more balanced in favor of workers that would be different. Large companies can sell bonds very easily, which means abundant jobs. (Banks are still being stingy, and I think the Fed should start forcing more loans.) You don't want it otherwise. Also, many prices sat still for 30 years, that wasn't going to last forever. For 20 years my chinos at Kmart were 20 bucks. The price of a phone? 20 years ago your smart phone would have cost millions, if it existed.

[@fwily2580]

Ugh.

[@donchristie420]

First thing to look at is how much that corporate entities profits are!!

[@thinktalk9250]

Clears lots of unclear concept

[@SamuelSurbrook98]

I remember when inflation was just going up 🛗. Inflation two 2️⃣ years ago in January 2022 was growing to a record high the highest it had been since 1981-1982. It is interesting 🤨 to understand how the CPI works. The CPI (Consumer Price Index) is the measurement of how much inflation there is. There is also the price of oil in that there should be some regulation so that the price of oil doesn’t spike.

[@NamNam-me7wy]

Character In the video It's great, I like it a lot $$

[@erictang4447]

So many crypto trollers in comment section

[@Ministry_0f_Truth]

Those are spams/scams, not trollers.

[@johngian1831]

Now in 2023 I am afraid we are heading to stagflation which is really bad. If so , we will have economic depression. Also, I think that you should mention speculation over inflation. Nice video by the way!

[@stephaniehale946]

*Please get a better host who doesn't break into a crazy laugh in the middle of an interview. Someone more sensible, someone with a little class and someone more poised would be a better host for these kind of videos.*

[@sandwitht6264]

exactly, like a kid trying to look smart, having some sort of understanding the implying inside jokes where there is none actually.

[@sandwitht6264]

quit that giggling laugh, it's a finance topic not a comedy or dating meet

[@martytrain]

Ok so now we know the affects of high inflation some will ask, what do governments plan to do to stop banks from confiscating peoples assets and basic survival such as food and shelter? If we have a situation where wages dont match prices and we dont have ledislation in place to protect the population with basics it looks as if a democraticaly elected government was not fulfiling its remit to protect its population from starvation and death. Some people argue that if the public services have been put in private control, its no longer a governments responsibility to make sure its citizens are guaranteed the continuation of such provision.

[@rickmorthy4576]

thats why i buy land and houses and plant trees.. gold if you have extra gold is important when there is war coming

[@nope100]

Money printing has nothing to do with it....brilliant.

[@Guerrilla727]

Everything goes up except our wages, while all the profit goes to the richest people in the country. Privatize the gains and socialize the losses. Then people wonder why nobody wants to work for scraps.

[@sumitChand.offcial]

Some one give this guy a medal

[@garyoakham9723]

You voted for this why are you complaining

[@Guerrilla727]

@@garyoakham9723No I didn't.

[@cayden3470]

@@garyoakham9723 Exactly. Everyone wants free stuff from big government so they vote for the bullshit and when they get bullshit in return they complain. People are too stupid to realise that until we decentralize the financial system shit will only get worst.

[@alenpaul2523]

@@cayden3470 true

[@bangonreviews]

Why is deflationary economy bad for the hard workers? If the expert had so much understanding of what it actually is she would have been able to benefit from the actual knowledge and have those inflationary sacks of papers we call money 💰 to give around!

[@qweds3127]

Deflationary economy would encourage people to hoard money in the hopes that the prices of goods in the following years would be lower . This is bad because consumption would go down and companies would go under . PS: I am not an expert . This is what I got from seeing other videos .

[@thonithoni4741]

The inflation is horor, night mare, it caused by time value of money principal. very wrong principle, but all country use it. The federal reserve should let us free from this situation. No inflation, no time value of money. So we costumer can have much product goods and services. Producer can produce more things without worry

[@HydrixTheory]

Id love see everything go back to the 1960 prices that be a dream!!!!!

[@eddieschneider1947]

i like the 1810 prices more.

[@divinefavour1289]

tell your government to cut spending and stop printing money

[@Ministry_0f_Truth]

Including your wage? :)

[@HydrixTheory]

@@Ministry_0f_Truth Honestly wages back then were still better then today in terms of living

[@Ministry_0f_Truth]

@@HydrixTheory Well, maybe better than right now during the crisis, but generally speaking, living standards tend to improve over decades across various countries.

[@jAMES-xy6wh]

The part about money supply didn't age well.

[@shanroxalot5354]

What changed that makes that so?

[@alparslankorkmaz2964]

Nice video.

[@20human00]

Joumanna Bercetche is so beautiful, intelligent, and articulate!

[@slouchfromlocals]

Had to rewind after every time they showed her on screen. I hate it when they put on women like that to explain important concepts.

[@Ministry_0f_Truth]

@@slouchfromlocals LoL, same here! It's hard to focus. She's gorgeous and gives me very positive vibes. A dream woman indeed.

[@Ministry_0f_Truth]

Damn.. Joumanna is so gorgeous, intelligent and knowledgeable, probably also fun. She gives me really great vibes. A dream woman indeed (at least the first impression). The downside is, it makes it difficult to focus on the topic. That's why I don't like seeing such women in videos where I'm trying to learn something :)

[@thebishanmethod]

You best get better at focusing when beautiful intelligent women talk cause there’s plenty of them nowadays mate! Welcome to 2022 :)

[@Ministry_0f_Truth]

@@thebishanmethod Well.. Somehow I only see them on the internet, almost never in real life. And even then, many beautiful women today are covered in tattoos or have bad attitude (which would be called toxic if they were men). Yes, there are plenty of beautiful women, but most of them don't make me think "wow, this is a dream woman". Joumanna stands out for me, that's why I wrote a post about it. But like I said, it's just the first impression. I don't know her.

[@amilton1015]

Wow! Great lesson - thank you so much

[@CNBCi]

You're very welcome!

[@RupeshBhandari-977]

A trip down the memory lane. :)

[@sumitChand.offcial]

Nice

[@pedroSilesia]

Not sure about presenter's loud laughs when the other presenter was explaining things. Not sure also about her outfit, doesn't look professional.

[@manurr10]

How racist you are, can't you look she is oppressed?

[@007h13]

Usa: we already have 23 trilion debt Also USA banks: print more. Printer guy keyboard : 9999999999999999999 Printer : are you sure you want to print 9999999999999999999 Printer guy : who hoooo more plastic for idiots that eventually will come back to the rich stockpiling it and more needed to be printed and the circle never ends. Capitalism for the rich to get richer without a purpose not even paying taxes.

[@prashantkumarsingh8121]

I rarely think that women are good but she is damn good. What A Explanation!

[@earthboy8258]

Peoples asking salary getting higher every year which cause inflation.

[@ilhamrj2599]

Inflation good for growing economy (generated by demand), but inflation caused by scarcity of bad necessity… that is just bad.

[@gw7120]

Inflation is when you go the grocery and see everything cost more , you get less for your dollar

[@timedone8502]

Thanks for the education..

[@dragon.fromindia3235]

AMERICA SHOULD GO FOR DEMONETIZATION.

[@alenpaul2523]

@@dragon.fromindia3235 like India ?

[@seanyun6816]

THE BENCHMARK OIL PRICES WILL BE IN 80$ RANGE IN 4TH Q BECAUSE OF STILL TOOOO MUCH LIQUIDITY OUTTHERE AND THE US$ WILL BE DEVALUED IN LINE WITH THE STAGFLATION! FINALLY IT'S TIME TO BUY ' GOLD'!!!:)

[@pragyamishra90]

Informative video

[@DannyChowmrchow]

forth

[@itconsgenio]

7:54 Am i the only one saying that this concept is wrong? When an economy is growing prices should be much more lower or at least close to “free” right? given the fact that the gov has done its job well for the people. From the context of a hypothetical small country (with no international trading partners) Farmers will get higher pay for their crops Transportation will improve as gov find solution for cheap or free public transportation Housing will be subsided or free Education will be subsidised or free Citizens would almost be in equal status. I am mot an economist i am IT.

[@hirohitomatsui8119]

dont be silly, you are wrong. When an economy grows GDP increases because of the increase in aggregate demand. If prices decreased there would be a shortage of good and services as demand would outweigh supply

[@divinefavour1289]

dont listen to hirohito, you are right. in a strong growing economy prices should go down and people's savings should go up

[@InfoHubZA]

I was expecting to hear about how air is blown into and escapes balloons. Dumb me!

[@shresthjain1625]

These crypto scammers just wait for the video to release and damn 100s of them are there in a blink of second and ya say hello to mr John , mr Wayne and every other

[@Peace-ju9us]

...if you lose it is a bad thing...how the gov't deceases the value of the money in your pocket...

[@abhijeetsonar8950]

The only question I was waiting for!!

[@anthonyszymon3032]

Great Stuff. I started watching your videos last year as a beginner before giving stock market a trial. I was able to make $972,000 within 3 Months with a capital of $200,000. keep it up!

[@aaroncecil5381]

Wow. That's Impressive! How were you able to make that?

[@anthonyszymon3032]

Despite the fact that I take glory for the achievement, I honestly have to tell you, i was guided by ASHLEY AIRAGAHI i found through a news blog. She aided me achieve that.

[@aaroncecil5381]

How can i reach this broker lady?

[@justinclynes481]

I just looked her name up on the internet and i got everything i need to know about her.

[@markharry8486]

i have heard about ASHLEY AIRAGAHI, she is a professional

[@rephaelreyes8552]

Inflation is transitory they say 🤡

[@marianachila5372]

Onu amp

[@Jayvardhanworld]

Am I poor person? This question is asked trillions of times to central govt but still not get any confirmation message...so how can this possible?

[@imatimetraveler5760]

Did anyone see that 1970 cash register 😂

[@CesarGomez-nw4zt]

The US needs to start hiking interest rates ASAP, or start printing $500 dollar notes....$100 dollar notes are beginning to be worthless

[@Buttersausage]

Ugh another ignorant individual

[@CesarGomez-nw4zt]

@@Buttersausage Ok "Einstein", explain how a $100 bill has not devalued since the 70's ?... or should I call you "Homer" ?... Pendejo !