Inflation:The explanation to how your FDs are not returning your money!

Inflation:The Secret Robber

The prices of our daily necessities are rising by leaps and bounds. Some people call it price hike. People in general are hard hit by this price is hike or in financial terms called as inflation. This price hike has become a serious problem for the society.

Rise of fall of prices depends on supply and demand cycle. If supply is more,price falls. Now supply falls short owing to increasing population and demand must be more for the same reason.So,price rise is a must according to the law of supply and demand.

Economists say that is a must in a developing country going to heavy expenditure on developmental works through time-bound plans like five year plans in India. It gives rise to inflation which is the main cause of price rise in a developing country.Being a developing country India is facing such price rises.

However,problem arises when wages don't keep pace with the hikes in prices of commodities.Moreover,even when the supply and demand cycle is fixed,producers refuse to slash their prices.Thus,the cycle continues.People from the lower and middle classes suffer a lot.

The government is also at fault.In the recent times,sometimes it has ordered reckless printing of currency bills without having sufficient amount of gold bonds at their disposal in the RBI's vaults.If you have seen Money Heist,a popular web series on Netflix,then you can easily get that excessive printing of money can also indirectly result in inflation.

Here,comes the concept of real rate of returns.Let us suppose we have ₹100000 as a Fixed Deposit in any bank.These FDs usually offer 5% return on the amount invested.However,at the same time,rate of inflation is 6% on average.This means your money is actually severely underperforming.

The only way to get growth out of your investments is putting your money at such a place where it must outperform the rate of inflation.

The pandemic has hit us hard.Things of daily use such as essentials,automobiles, technology products as well as transport industry has shot up.Prices of Petrol have already reached the mark of ₹100 while the price of 1 barrel of crude oil is ₹36.76.All these also show how some private corporates have been increasing their product's prices in the name of inflation.The government has also extracted taxes on various items in the name of inflation.

This article is co-authored by Master Piyush R. Prusti.He has been an active writer on our blog continuously providing us with good content in written format.You can reach out to him at:

piyushprusti@gmail.com

This is the 5th blog in the Finance series.

Links:

🛑Stock Market Investing

Comments

#Cancelled: But Is Justice Having a Blast?

“Sticks and stones may break my bones, but words can never hurt me”. That's an old saying some of us have heard for years, but our words are genuinely powerful today. If you are not careful, one wrong word or move could get you cancelled. In the age of digital technology, past and present events are accessible at any time with a click. It has always been a challenging time to summon groups of people to join the public fray to challenge others online for past words or actions. In the digital age, past actions regarded as incongruent with current norms are subject to criticism and rebuke. This phenomenon is now commonly called “cancel culture,” a strategy by groups of individuals using social pressure to shun a target accused of offensive words or deeds. The concept of cancel culture lacks a universally agreed-upon definition. Most definitions centre around themes of accountability but diverge regarding their impact. Cancel culture is a blend of fun and fury that exposes

Health Workers continue to resign; Seeking major overhaul in policies.

Scarcity of Health Workers -Piyush R. Prusti This issue is concerning India . Actually why the health workers are unwilling to do their jobs now-a-days ? Is it the fear of COVID ? Definitely not. Since the starting of this deadly COVID-19 pandemic which has no proper treatment or medicine yet,health workers are the one who are making their day and night alike to cure the patients and down surge the active cases. But in these recent weeks,the spike in the COVID cases is a cause of worry for all of us. On the other side many health workers are resigning.There has been oxygen scarcity in the country. Many people are dying for lack of oxygen. It is the government who is controlling the availability of oxygen in the hospitals as per need. If the government cannot make it possible to arrange for the oxygen then how can the health workers save the patients. It is practically impossible on the part of the health work

Coronavirus:Everything you need to know about the pandemic

Coronavirus is also called COVID-19 has turned into a menace for the world.But there has been a lot of ambiguity on the topic hence the article. Coronavirus:What is it? Coronavirus is any virus which causes respiratory disorders.SARS, MERS and interestingly common cold is also a type of coronavirus.But the latest coronavirus is called as Novel Coronavirus which originated in Wuhan city of China in December 2019.The most probable reason behind the origination of this virus is due to the consumption of meat of various animals, especially bats.The mortality rate of this virus is around 2 percent making it more contagious.It has an incubation period of 14 days. Symptoms: Most common symptoms: i) Fever ii) Dry cough iii) Tiredness Less common symptoms: i) Aches and pains ii) Sore throat iii) Diarrhoea iv) Conjunctivitis v)Headache vi) Loss of taste or smell vii) A rash on skin, or discolouration of fingers or toes Serious symptoms: i) Difficulty breathing or shortness of brea

Mr. Fact Checker

Search This Blog