What is inflation? explain

The word inflation is not unfamiliar to most people, because as long as we watch the news online, we will see the news about inflation from time to time.

Many friends spoke to their father: it's really unlucky to encounter inflation after buying insurance! After listening to these friends' complaints, my father felt sorry for them, because insurance will really lose money when it meets inflation.

What is inflation? Inflation can be literally understood as: the price of commodities in circulation has risen, and the same commodities need more money to buy after inflation.

The general academic definition of inflation is: because the money supply is greater than the actual demand of money, that is, the actual purchasing power is greater than the output supply, which leads to the devaluation of money and the continuous soaring of prices.

Generally speaking, inflation can be understood as a very simple sentence, that is, the currency depreciates and money is worthless.

Inflation has a great influence on ordinary people. Take the price increase of pork some time ago as an example. In the past, ten yuan a catty of pork suddenly rose to twenty or thirty yuan a catty.

In the case of no increase in wages, the ability of ordinary people to buy pork has been greatly deducted, so the ultimate victim of inflation is ordinary people. So the reason why I don't recommend buying financial insurance is inflation: "Why don't I suggest you buy financial insurance?"

Let's look at a set of data to intuitively feel inflation:

The above picture shows the change of inflation rate from June to June, 2020. It can be seen that the inflation rate rose slightly in February, and it has been in a downward trend from March to June, which is closely related to the impact of the COVID-19 epidemic on the economy.

But overall, the inflation rate in China in the first half of the year did not change much. Judging from this trend, the inflation rate should rise gradually in the second half of this year.