There is more money but less shopping, inflation hurts everyone in the economy

 

Here is how I understand inflation and the problems it has created in the past few decades, a fellow goes to their employer and asks them to raise their salary, the amount they are currently earning now is not enough to sustain them, so the employer tries very hard to negotiate the situation out of the problem but all attempts fail. The workers threatened to tear down the warehouse if their salaries are not increased, they claim the amount they are getting is not enough to sustain them through their daily programs, the employer therefore adds three dirhams to every dirham that is used to buy bread, when the dispute is settled the employees go back home satisfied that they have made a clever bargain in the course of the day which they have actually won.

On the other side of their neighborhood, the shopkeeper sees that her customers have become very rich recently, so she decides to raise the price of bread by three dirhams, her customers are now spending four dirhams to buy the same size of bread, which they used to buy just for one dirham,  price of everything else skyrockets in the neighborhoods, they sat down in a meeting and said this to themselves, “we are paying more money for the same amount of goods, have we become any richer?” they asked one another,

When the factory employers raises the wages of their employees the bakers also raise the prices of bread, you get more notes to take to the food stores and get the same amount of food you got when you were paid lowly, So life hasn’t improved for anyone at all, the struggle is still on.

Inflation is on the rise because everybody is hiking the prices of their goods, they all want to become trillionaires, the school teacher raises the tuition fees, the drug companies raise the prices of their medicine and in turn indirectly contribute to high cost of healthcare, the baker raises the price of his bread, the garment maker raises the prices of his clothes… everyone is raising their prices because they all want to become trillionaires, the prices are so high while the quantity of goods still remains the same. Won’t people realize the money they are chasing after is worthless compared to the goods they have at their disposal?



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