Alot of us have read about the on-going hyperinflation in Zimbabwe.
But how much do we actually know about it’s origin.? How this scary hyper inflation was born?
Recently, the Zimbabwe’s government has dropped some zeros from the currency, making it much more manageable. However this isn’t going to solve the problem.
Tags: economics, economy, economy crisis, inflation, ZimbabweWhile global economy outlook has gone down over the past months, inflation hasn’t.
Let’s review some interesting data on the current inflation rate in some countries which have taken a heavy toll.
In ZImbabwe, we are witnessing an annual inflation rate of 2.2 million percent. That’s the official data released by the government. Analyst would put the actual rate at 10 million percent!
Without a doubt, the country is experiencing an extreme case of hyperinflation.
In fact, the ZImbabwe government has recently introduced a 100 billion dollar note, which ironically is not even sufficient for someone to afford a bread.
So what is the Zimbabwe government doing right now?
Interestingly, they have decided to strip the zeros off the currency as the denominations proved too hard to manage.
In Europe, inflation rate continues to soar to record heights at 3.3% and 3.8% in Germany and England respectively.
In Asia, the Singapore economy threads along an inflation rate of 7.5% in June and South Korea is reaching a 10 year high at 5.7%. Thailand saw a rate of 8.9% in June.
Tags: economics, global financial crisis, global inflation crisis, inflation, oil prices, price hike
Inflation is indeed worrying, especially in the region of Asia. Not only is it causing resentment and angry protests in countries like Malaysia, South Korea and India, it is threatening the progress made by Asia in the past 20 years.
Referring to this news article, the breakdown of the situation is;
1. India and South Korea are experiencing their fastest rise in inflation rate in 7 years
- I would say that this situation has manifested itself most evidently in the recent spade of protests which have erupted in the two countries, which of course the most violent ones took place in South Korea where the people have no qualms about showing how they angry they feel.
Tags: economics, global inflation crisis, inflation, oil prices, price hikeActually, it’s inevitable that oil price will head north. The picture is pretty clear some years ago.
Then, the emergence of china and other oil guzzling developing economies and USA’s energy inefficient oil addicted economy translated into higher demand for oil in the future(that’s now). Futhermore, then oil prospecting did not manage to succeed to discover significantly more oil field( there’s two scenario, either then the price of oil is not attractive enough for major oil firms to explore for more oil field or simply they fail to find enough of them). Hence supply presently cannot cope with the demand, as supply are unable to expand/increase sufficiently due to supply bottleneck. The industry is unable to increase capacity in the short term. This also applies to the refineries as there isn’t any significant spare capacity in this industry.
However, given these supply and demand problems oil prices should not climb rapidly in the short term as demand nor supply never changed abruptly. Instead, weak USD is the factor for the greater jump. You simply have to pay more for oil in USD since USD is weaker now, as the same amount of USD cannot buy as much oil as before.
While most economics are reeling in shock from the high oil prices, and several scrambling to seek remedies to the inflation crisis, Malaysia took a bold step forward by reducing its heavy fuel subsidies last week, leading to an immediate fuel price hike of 41% .
The result? Widespread resentment and pockets of protests across the country. While such a move is unpopular, it was only a matter of time when the government realized that much of their annual budget has gone to subsidizing fuel price, which they can no longer continue given the progressive increase in oil prices over the past few months. In fact, the reduction in fuel subsidies is said to save the government up to US$4.3 billion, in which part of this savings can be passed on to subsidize other more crucial necessities to tide the country and its people over this troubled times.
Tags: economics, energy crisis, global inflation crisis, inflation, oil prices, price hikeUnless you have been living in a cave and feeding off wild grass and animals, you might have been hearing more of these two words recently - Oil and Inflation.
What we have been witnessing (or in fact experiencing) for the past few months, since the start of October 2007 to now, June 2008, is this decade’s worst inflation. In US, consumer price index has been rising on an average of 4% (month-on-month basis). What is more worrying is that the current situation is not inflation due to economic growth, but a myriad of factors involving a combination of several conditions which has led to today’s crisis.
One of the major factors is Oil. More »
Tags: economics, energy crisis, global inflation crisis, inflation, oil prices, opec, price hike, US
Ok, I guess this post is slightly slow considering that is piece of news is approximately 4 days old. For those of you out there who have yet to find out, Dow Chemical Company has called a price hike of 20% citing the high costs of energy and raw materials.
Press release here
Tags: dow chemical, economics, energy crisis, inflation, oil prices, price hike
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