Inflation Explained | What is causing inflation? | Why is inflation so high? | How to fix inflation?

Have you ever wondered why inflation happens? In this video we’ll look into everything you need to know about what might be causing the inflation we’re experiencing right now.
Inflation is the decline of purchasing power of a given currency over time. In other words, take the average price of a basket of selected goods and services in the economy and estimate the rate at which the purchasing power declines. You can also look at it as the rise in the general level of prices, often expressed as a percentage. Now many wonder why it’s happening and how to prevent it from accelerating at the rate it currently is. There are certainly many events that are causing inflation to rise, such as the war in Ukraine and new and recurring lockdowns in places like China due to Covid-19. However, there are many other things that could be contributing to the recent 40-year high in the United States and acceleration of inflation around the globe. As inflation will likely get worse before it gets better, we take a look at a few theories as to why this is happening and potential ways of how to fix it and slow the rate of inflation.
Reason #1 - Pandemic Caused Shortages.
Reason #2 - Climbing Oil Prices
Reason #3 - Government Stimulus
Reason #4 - Corporate Greed
Lastly, we look at how to fix inflation? The two ways discussed in the video are the Federal Reserve raising interest rates and Government Intervention.
Sources:
www.investopedia.com/terms/i/...
www.vox.com/the-goods/2299473...
www.eia.gov/tools/faqs/faq.ph...
mint.intuit.com/blog/planning....
#inflation #inflationexplained #inflation2022

[@claire7322]

I never realized how complex and fragile the economy is.

[@IllustratetoEducate]

I didn’t either! It’s crazy…

[@MeikaiX]

It's just capitalism.....mostly lol

[@cherokeeoutlaw2.011]

Go to college and take a class

[@mosijahi3096]

@@cherokeeoutlaw2.011 are you kidding, if so you don’t need to go to college to learn about this.

[@mosijahi3096]

@giveme5mins we already know what you just mentioned, all the ton of geopolitical beliefs……..you just mentioned, may not be relevant for you to know. Sitting in your sit as you read this can be very layered,tons of biological events are happening, I don’t need to explain all of them for you to understand how to sit with the proper posture. So just stop it with the unnecessary “knowledge” gymnastics.

[@maximilianogarciachirinos3663]

Price control is a terrible solution. Like the late economist Milton Friedman used to say, the only way to stop inflation is by stop printing money.

[@IllustratetoEducate]

I feel like we’re not doing a good job at stopping printing money… it seems we do it without thinking nowadays.

[@maximilianogarciachirinos3663]

@@IllustratetoEducate I agree 100%. Keep the good work. Isee that your subscribers are growing. You deserve it.

[@maximilianogarciachirinos3663]

@Pooka Stuff That is the problem given away money out of the tax payer money to try to fix the economy. That is a very Keynesian and misguided why to try solve a problem in my opinion.

[@maximilianogarciachirinos3663]

@Pooka Stuff The government shouldn't have to shut down the econmy completely to later try to reestablish it artificially. There are other ways like socia distance and washing your hands regularly. Common sense.

[@brianlaudrupchannel]

Stop printing money and creating more goods and services

[@damonteforney8076]

I honestly wonder this myself with everything that’s going on. People are quick to blame certain things when there’s a lot more to it then just blaming something or someone. Sometimes these issues are long occurring and happen over time as the video shows.

[@ryan1982o]

I just wish this video was a little bit more informed. The rise in gas rates stems from 2007/2008 and the major companies who control oil. The Russia/Ukrainian issue just added fuel (see what I did there) to the fire. I do agree some corporate companies may be over charging but a lot of this correlates with the other point you made on supply chains. It starts from the bottom. If plastic costs so much more and is in short supply well then product cost has to go up. Can’t keep people working in your factory, product cost has to go up. Transportation, which you mentioned, plays a big roll in this too. Even though I thought the video was well done I just don’t think it in total explains what inflation is, in todays market. Will definitely still throw you a like, glad you’re doing more than most, all learning is good learning!

[@naomieharris3367]

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[@noraemelda3714]

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[@noraemelda3714]

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[@noraemelda3714]

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[@muhammadfaaiz1991]

One significant monetary way to curb Inflation is to control the money supply in the economy

[@thehouse2620]

I found this video after I asked myself how increasing interest rates decreased inflation. I was only factoring in businesses taking in more debt to further their business. I didn't think of consumers decreasing demand. I would think that decrease would happen naturally as well. I imagine people are starting to buy less expensive items

[@johncalmerin6689]

volatility between the supply and demand increases/ decrease the prices, the massive government spending around the world also can increase the prices, what we are seeing now is price manipulation, inflation, over spending, commodity price war and logistical problem. Feds has no choice but to increase the interest rates soon.

[@cookmania3465]

Printing money causes inflation. It's not that deep. Money printers go BRRRRRRR

[@shanehess8950]

Nailed it! Another great video Dan!

[@IllustratetoEducate]

Thank you Shane! I’m hoping this can be helpful for everyone to know why we are seeing the inflation increases lately.

[@jimbridger65]

Another awesome video. And love the new intro graphics!

[@IllustratetoEducate]

Thank you! I spent a good amount of time making what I hoped would be a cool introduction.

[@hr1meg]

"Only Government Creates Inflation" - Milton Friedman Watch this video and stop blaming the war in Ukraine or China. Educate yourself.

[@kensmechanicalaffair]

The Fed is not the Government, it's a central private bank.

[@Ez4u2bnvs]

What an idiotic mishmash of nonsense. Inflation is created by printing money, devaluing the currency, the end.

[@clarestucki5151]

There are only three things that can cause price inflation. No.1, monetary inflation (raising the ratio of money in circulation to amount of goods and services [GDP] available) No.2, increase in demand. No.3, reduction in supply. Monetary inflation is by far the most important in the instances when most all prices are rising.

[@gregoryfugal4722]

Inflation really is boiled down to supply and demand. If there is an increase in supply (decreased scarcity) the demand for it will decrease. Take water for example. In a desert, or to a thirsty person who can’t get it, water is invaluable. This because it’s so scarce. But for someone who lives in an area with tons of rain, flooding and plenty of access to fresh water sources, its value becomes so low people hate it. To bring back to topic, if I for example, print a bunch of money, it will suddenly be worth less. So these stimulus packages, government debt, and bailouts are mostly responsible for why we are dealing with this now. The other things you listed definitely factor into it though.

[@dava73]

Brilliant, thanks for explaining that so well! WE ARE ALL DOOMED!!!!!

[@IllustratetoEducate]

Haha I hope not, but it sure seems like we’re in for a rough time.

[@KimPoonthanitkul]

@@IllustratetoEducate Rough time? No, this is the end my friend.

[@chadpowell1832]

Great video again

[@IllustratetoEducate]

Thanks Chad for watching this video! Always appreciate your support! 👍🏼

[@michaelkummer4740]

You deserve to have over 1 million subs

[@IllustratetoEducate]

Thank you! 🙏🏼 Maybe someday…

[@codyac5580]

I learned nothing first time watching due to being intrigued by the art work lol

[@IllustratetoEducate]

Nothing wrong with that 😂

[@brianlaudrupchannel]

It's simple, real wealth of a country is not money but goods and services. If there is alot more money around than goods and services then prices go up. Printing money which is what the US does causes alot of inflation problem's. Its mostly government intervention that causes problems. Free markets with no regulations and low taxes will fix this problem.

[@ShaneCragun]

Nice!

[@diegovelez8192]

I don’t get corporations hiking prices in doing so they help inflation go up and force de treasury to hike prices resulting in a stock market crash. The private sector is ultimately hurting themselves, with this price hike.

[@mrmateojones8368]

Yea it doesn’t really make sense when you sit there and think about it does it?……………..

[@almightyraven8220]

Yeah, would be dumb to raise prices if people are buying less if its too expensive, and leads to less profit over the long run..

[@jazzyj6640]

And pay stays the same. 😊

[@wirdjadochnichts]

Also speculation is a huge problem. Some of those commodities like weat and oil get more expensive because people bet on it.

[@kensmechanicalaffair]

Well, that causes an overvalued product which creates bubbles.

[@wirdjadochnichts]

@@kensmechanicalaffair well the overvaluation in itself is the bubble.

[@Emilios7777]

It is #3 not the #1,#2 or #4

[@natnaeltulu1012]

3:45

[@angryzak4389]

Maybe... just maybe the government should step out of the way and stop centralizing everything. It seems we have the most problems when the government gets the most involved

[@satrah101]

What's it call when it's not inflation but the pizza is half the size at the same cost. Is that still inflation?

[@IllustratetoEducate]

That’s happens far too often. Especially with cereal. It’s kind of ridiculous. I’d say that’s inflation as well.

[@thetachyon456]

Shrinkflation, it is still technically inflation though

[@kensmechanicalaffair]

Unjust weights, thievery.

[@nihilist1345]

well explain

[@IllustratetoEducate]

Thank you! :)

[@DaleBrett72]

Greed, no other words needed.

[@pazimmerman1]

Number one reason is gas prices.

[@alfe5992]

It would be awesome if you could some videos on religion?

[@IllustratetoEducate]

It’s a great idea! However, I’ve kind of steered clear from religion because it’s a pretty sensitive topic. I’d hate to offend anyone or not represent their religious beliefs correctly.

[@alfe5992]

@@IllustratetoEducate That's fine, thanks for responding!

[@obeyyah7404]

A crown was given to the beast so it could go out and conquer.

[@AV1611citizen]

One word summary, Brandon!

[@jrsx5826]

Orange man started this mess by cutting tax on corporations. Good job carrot 🥕

[@AV1611citizen]

@@jrsx5826 source

[@heilseitan5838]

Inflation is worldwide, not just in MURICA like the Trumpies like to believe.

[@AV1611citizen]

@@heilseitan5838 it's not.

[@djsmity2029]

How did Joe Biden cause a supply chain shortage?

[@maxineasbury2566]

You didn't explain why the price goes up. You just said it goes up.

[@IllustratetoEducate]

Please watch again and look for the 4 reasons why inflation is happening. I number them very clearly.

[@andrewalonsi]

"would require bipartisan support" ah great so the problem will never be fixed...yay

[@IllustratetoEducate]

It’s going to be tough if it ever happens…

[@janetsayers9230]

Wouldn't it be better for govt to regulate price gouging in companies. Can't the govt make it a law to stop companies rising food prices.And also a cap on rents. Surely rising interest rates will accentuate the excuse of companies to raise product prices. And land owners to justify rent rises and also raise house prices. All my life I've not understood this inflation problem, but now I do. It's government deregulation. If the govts took charge to regulate business, we wouldn't have this bullshit " theory" cos it's a revolving door situation NOT REGULATED BY GOVERNMENTS!!! IVE CRACKED IT ❗🆘

[@dracorpgroup]

>The rise in prices is a reaction to the real cause of inflation. The basic cause of inflation over time is the continuing devaluation of the dollar. This in turn is caused by continuing deficits; that is, governments creating more money to cover the deficits. >If we return to the speech given by the then President Nixon in August 1971 we see that the dollar would no longer be backed by gold. This allowed governments to print or create new money to allow spending beyond the GDP each year. >A small house in 1971 could purchased for $10,000, but, that same house in 2021 would now cost $300,000; that is, the same house. The house has not gotten bigger but the dollar has gotten smaller by a factor of thirty times. Look at the Dow Jones and we see that over the same period that index has risen by the same thirty times. >Basically, each dollar today is worth three cents compared to 1971 so we need more of these devalued dollars to buy the same product today compared to 1971. Further, salaries have not increased by that same factor but it now takes two salaries to live. The increase in prices is people trying to catch up to this devaluation. It will not happen.

[@alfonstabz9741]

5:13 tax? if government increase tax business put those tax in goods increase inflation. What dumb idea from government.

[@gamingleo3094]

how will raising tax help stop inflation? and we don't need government intervention we already had enough of that

[@jrsx5826]

Tax the corporate. Trumpers let the corporation get a tax cut and look what we dealing with me. Good job Orange man

[@TTKChrisking]

I'm still of the mind that setting the Federal Minimum Wage at $0.00 would be the best way of addressing inflation. As you mention many have deemed it a perpetual cycle of increasing costs. Surely not the only way. But I believe the most effective way would be for government to get the hell out of the way and stop making things worse.

[@IllustratetoEducate]

Thank you for watching this and sharing your viewpoint. 👍🏼

[@TTKChrisking]

@@IllustratetoEducate thanks! Keep up the great work!!

[@Passionate_Potato]

But minimum wage hasn't increased in over 10 years and inflation has occured every year. That's not the cause of this higher inflation now. Telling people they need to suffer worse than now shouldn't be the solution.

[@lpa4058]

@@Passionate_Potato thank you!!! Increasing poverty is not the answer

[@TTKChrisking]

@@Passionate_Potato You really see a correlation between free markets and "people suffering worse"? how do you figure? should we raise the minimum wage to $20? how about $45? or $70?

[@nthperson]

The United States (and almost all other countries) experience economic cycles of boom and bust. These cycles have averaged 18-21 years going back several centuries. When the cycle reaches the point of maximum inflationary stress an economy crashes. The most important cause of inflation, the cause of the cyclical crashes, is largely ignored. This is operation the nations land markets, that is the markets for land in towns and cities, land used in agriculture, land that contains all manner of natural resources, and land that is not normally thought of as land. These are natural assets such as frequencies on the broadcast spectrum, the paths around the earth taken up by satellites, or take-off and landing slots at airports. All of these assets have an inelastic supply. The markets for these natural assets with an inelastic supply attract speculative investment and hoarding. Here are the economics that make our land markets the culprit. Every parcel or tract of land or natural asset has some potential annual rental value. This rental value is not produced by those who control the asset; it is generated by aggregate societal investment in public goods and services. This rental value needs to be publicly collected. Most of it is not. Most of it is privately taken, capitalized into higher and higher selling prices for land and natural assets. Essentially, those in our society who produce goods and provide services are required to pay non-producing rentier interests in order to access what nature provides. Think of what happens to the price of residential property. Prices tend to keep climbing until they are no longer affordable. Things start to fall apart. Unemployment increases. Recession deepens. Property prices crash. Government begins to intervene and eventually the credit-fueled and speculation-driven property markets begin to inflate once again. But, understand that what is climbing and crashing are not HOUSING prices but LAND prices. Housing is a depreciating asset, an asset that requires constant expenditure of money for maintenance. Then, every decade or so, the house's systems have to be replaced. Does it make any sense that local communities financially penalize people for maintaining their house? The optimum rate of taxation on housing (at least up to a value below mansions) is ZERO. What economics teaches us clearly is that if we tame our land markets we will essentially tame inflation. And, by doing so, we will tame the economic cycle. Edward J. Dodson, M.L.A. Director School of Cooperative Individualism www.cooperative-individualism.org

[@MrJeorgelee]

So this video didn't really explain anything. An example is that the video states a possible cause for inflation is Ukraine and tension with Russia. But what about it directly or indirectly caused it? Supply shortage is a great one to address directly. What about supply shortage caused inflation across the board in every sector of our budget. I'm sure that there are time constraints but a follow up video for each example is warranted. It would be great to not only answer a question on the surface but answer the questions they didn't know was important. There is no spoon -neo

[@michaelduke5087]

That would take a several hour video. We are talking about the largest and most complex economies in the history of the world.

[@MrJeorgelee]

@@michaelduke5087 no it wouldn't don't try to over complicate an already complicated topic. @infographics did a fairly good job in 15 minutes. Another example in the "shortage" would be to briefly explain what is going on in the ports and what happened to the boat that clogged the way. In regards to the housing shortage cover that there are many new apartments being built. Unfortunately they are being built for higher end luxury apartments therefor less affordable housing all around. Its not simple but can be done.

[@kensmechanicalaffair]

In short people should know how and what fiat is, and how fractional banking is destroying lives. That's surface level.

[@drjoeset]

but yet Venezuela is bleeding oil, which could balance all these gas prices out.... but our government refuses to do business with Latinos in South America

[@peopletok5502]

It’s all about spending trillions of dollars by the government smh

[@davidcastle7212]

Where would inflation be w/o cheap/slave labor in china making most of our goodies?

[@ERMIL1]

"inflation is a monetary phenomenon" not because the war or supply chain lol go read some economics

[@IllustratetoEducate]

Isn’t supply and demand like the most basic of economic principles? How is inflation not also influenced (among monetary principles) by disruptions in the supply chain?

[@ERMIL1]

@@IllustratetoEducate kzbin.info/www/bejne/hJi2oo2BrZWghKs

[@vishnuts3748]

Inflation is caused by printing money it can be stopped by stop printing money. Inflation in US in December 2021 and January 2022 was 7.5 and 7% respectively Russia and Ukraine only got into the equation by end of February. And if you look closely you can see the US inflation was low before the bigining of pandemic. If it was the greedy corporation what happened then the corporations become kind hearted then??? Your observations are not objective. please correct the mistakes...

[@IllustratetoEducate]

This is an exact quote from the video “You can also look at it as the rise in the general level of prices, often expressed as a percentage.” I do have the correct definition of inflation. I’m sorry you didn’t find this objective. I clearly state that these are not my opinions, but economists and experts who clearly argue with each other. I feel I make this clear in the video. These are not my opinions. I don’t push any individual viewpoint. To me that seems the only way to present a argument like this in an objective way.

[@vishnuts3748]

@@IllustratetoEducate sorry I forgot to delete that part about defenition 😛. And for it to be objective you have to avoid invalid openions such a blaming inflation or war and corporate greed. Most economist argue that it is caused by increase in money supply and fall in production, supply chains issues. Only politicians blame it on corporate greed and war.

[@IllustratetoEducate]

@@vishnuts3748 sorry I have to disagree that in order to be objective it has to be void of “invalid opinions”. I haven’t come across that definition. My videos are meant to present as many viewpoints as possible so that you can determine yourself whether they are valid or invalid. If that’s not something you like, then my channel is not for you.

[@vishnuts3748]

@@IllustratetoEducate I would like to reiterate my point the inflation was 7% in January how does a war started on February 24th caused 7% inflation in January. It Is obviously not a cause by any logic. I was merely pointing out a mistake you made if you are unable to correct the mistake yes then the channel is not for me.

[@IllustratetoEducate]

@@vishnuts3748 inflation isn’t just caused by a single factor or even a handful of factors. All the reasons listed in the video have some effect on inflation. The economy is more complex than just saying one factor is causing inflation. Like saying it’s solely the printing of money is ignorant to the complexity of a global economy. Now what is having a greater impact, I don’t think anyone, even experts know. They will be studying it over the next several years to see how different events are impacting inflation. FYI inflation numbers in March increased to 8.54 from 7.87 in February and 7.48 in January. So yes, the war is most certainly playing a factor in the increase of inflation that will continue to rise through 2022. The rise of inflation is just beginning. It’s going to take time to see the results of the war on the inflation numbers. I think you’re expecting to see inflation take effect days after the war. The economy is much more complex than that. I think oil is the only commodity that adjusts relatively quickly. But food, for example can take months for us to see the inflation.

[@vondoromal7016]

To think that giving people money is the fault when the solution against recession is to give people money (stimulus). Instead of stop giving people money, maybe let's just quit giving corporations money. The beauty about UBI is that corporations will compete for profit and compete for talent that promotes more revenue for the company. Giving people money is a win win...

[@IllustratetoEducate]

Thank you for you comment on this. I love when people share their thoughts in the comments. Hoping it can be a place to have civil debates and conversations. :)

[@vondoromal7016]

@@IllustratetoEducate Hope eternal!

[@vondoromal7016]

@@IllustratetoEducate I hope you continue to do well as we traverse around this heightened political turmoil. You are providing an outstanding service! Keep up the Fire!

[@IllustratetoEducate]

@@vondoromal7016 definitely! Thank you!!

[@lacijohnson400]

Lol that’s not how economics work buddy. Giving people money, when production/ labor hasn’t increased would just cause even more inflation

[@STOPTheocracy]

No offense, but this overly complicates the topic and regurgitates common logical fallacies about inflation. In economics, inflation refers to a general increase in prices (which devalues our hard-earned money, making it so we don't get as much bang for our buck). So if we're basically just talking about price increases, then obviously the cause of inflation is the people who raise prices. I'm not trying to shame them, just being real about what's actually causing it. That said it is the job of the president to implement the necessary policies for preventing inflation from happening. My recommendation is that the government pay business people to stop raising prices. In the age of digital currency it's never been easier for the government to afford funding whatever the hell needs funding, without Federal Reserve bonds, borrowing, or taxation of the public, or corporations.

[@MrJeorgelee]

More specifically it's the speculators at wall street that drive the panic that trick or allows owners at every level from manufacturing to final delivery to gradually raise prices. By the time a product has hit the shelves for purchase it has undergone several prices hikes along the way. Do you think prices will go down to pre pandemic levels? I highly doubt it.

[@mrmateojones8368]

Think you missed the mark with this one.

[@gregoryfugal4722]

Uh, it’s not a decision by everyone to increase prices all at once. 😂 It’s a need to increase prices to maintain profits as they were. The need is based on the decreased purchasing power of the dollar due to increased supply. The dollar is being “inflated” by the government by “pri ting” more. It’s introduced into the market by spending.

[@OhIseeabee]

It's awesome when "educators" quote, "A study" or, "some economists think". I guess that's the beauty of YT for entities aiming to control the narrative. Life was good before 2020 from an economic perspective and it was getting even better (I was there, I remember. I don't need a crayon and marker video to tell me how things were). Our problems today lie squarely at the feet of poor policy and bad decision-making. The current team's poor policy and bad decision-making from a society that covets "image" over "efficacy". A biblical expression comes to mind; "we reap what we sow". Wallow in the fruits of your complicity people and stop working towards that degree from USM (University of Social Media).

[@gabrielswee585]

"Inflation" = *Price Gouging*

[@kensmechanicalaffair]

"Inflations sentiment" = *Price Gouging*

[@topG2001]

Let go Brandon!!!!

[@timjohnston9382]

VERY FUNNY VIDEO everything and anything is to blame for inflation ...but surprisingly only government can fix inflation ??? hmmm makes one wonder if only government can fix inflation maybe only government can cause it? check out milton freidman