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on exports and imports. Anyways guys, take care and I'll see

actually understand what it means. Understand how inflation

means but just the main thing is go back to this slide and

assets right? And then eventually interest rates in

expensive for us? And then obviously the impact that has

the purchasing power, does it become cheaper or more

where it's inflation that we're expecting to happen soon but

affects the currency. Does it value it or devalue it? What to

searches if you still don't understand exactly what it

it's already building up due to that speculation. Anyways guys

understand that as producers have higher costs they're

even happens. So that's what we call the built in inflation

definitely take notes as we're going through here and

can read more and more into inflation but even YouTube

obviously look back just to understand this more. I'm

going to be adding some more links into websites that you

so expectations that prices will continue to rise in the

know speculation goes on in the market. For example right now

producer price index so it's how much goods and services

the Fed are expecting that we're going to be tapering

the future. And what a lot of traders will try to do and

obviously going to push that on us as well because they still

essentially the economy they'll try to price that in before it

with a high standard of living costs. So with speculation you

future. This has an impact on cost wages and etcetera to deal

cost for consumers and how much goods cost for producers so

want to make a profit right so the third type of inflation is

increases it stimulates more economic consumption and thus

built in inflation. This is mainly due to speculation. Um

production cost increasing in price so you've got to

does not involve any print any printing of money but it

before we we're obviously going to get into this in more

involves the increase of consumer goods due to the

detail but CPI and PPI is consumer price index and

demand is higher leading to price increases then the second

demand. Supply and demand. Um when the monetary policy

in advance fundamentals as well So there's not just type one

but three these are the three main types. The first one is

type cost push inflation higher CPI and PPI so what briefly

demand push inflation. Essentially it's printing and

so most people will flock to their economy to buy their

for example or Japan that really that really exports a

type of inflation. There's actually three types. Uh four

detail when it comes to imports and exports in some of the

might be a bit of a problem for them but what they what they

expect them to have a currency that that is very or a currency

want is they want their exports to be as cheap as possible so

lot of products. In theory what do you want? I mean would you

later videos in the core fundamentals and then obviously

economy you are. Um so if you're an economy such as China

up these these two factors and just you know every economy

However our imports become cheaper. So you've got to weigh

just see which works for them. Now it depends on what type of

competitive because other nations can can provide cheaper

becomes stronger. Now there's obviously benefits and

goods for the you know for international economies.

will have to will have to weigh the these two factors up and

consequences of both these actions when deflation is

expensive for foreign nations and like we said we become less

said vice versa when purchasing power decreases when inflation

is up purchasing power increases because our currency

known as deflation the currency increases in value. The

Um let's look at deflation now. So when inflation is down also

true. Importers are harmed as imports become more expensive

costs a lot more to get the same imports as it did before.

purchasing power also increases. So you know how we

occurring. Exports are harmed since our goods are more

now. So as our currency and purchasing power decreases it

since foreign currency cost cost more of their own currency

so we can put cheaper prices and or due to our cheaper

others. Therefore we become very competitive in the market

prices we become competitive. However the opposite is also

other nations coming to buy products from us rather than

there's going to be a higher higher levels of interest of

we send internationally it becomes cheaper for us so

as their goods are cheaper for foreign nations. So think about

it as their currency devalues for other people to purchase

power decreases as we explain with that $100, 000 example.

to keep steady inflation at 2 percent rate

countries financial regulators attempt to avoid their goal is

of of inflation to see now ultimately this is what

Now what happens when inflation increases. So exporters benefit

that currency is cheaper for them right? So any exports that

inflation going down which is also called deflation. So in

when inflation is rising, the currency devalues. Purchasing

people financially stable so are the wages so it's GDP and

between one month to the next more than 50% is a crazy amount

that is is very weak. Now to make imports cheaper okay that

such a in such a short time is detrimental to a country as we

essentially they're the leading leading exporters in the world

which is considered 50% inflation month a month so

So to really break it down inflation and then going up and

markets, if you see whenever you see countries with higher

what what are the causes of inflation. So the main one is

explained here an extreme example is hyper inflation

then it is a good effect however too much inflation in

all inflation is bad. Don't get that wrong. Just because the

goods and we're going to be explaining this in much more

so more people are getting employed and having jobs more

it. The inflation printed, the weaker the purchasing power,

prices of things are going up doesn't mean it has a directly

money supply. The amount of money printed by a country is a

therefore a devalued currency. That's why when you look on the

of the currency. So the pros and cons of inflation. And not

significant factor in the cause of inflation. So think about

negative impact. If inflation is up but so is the employment

due to inflation and the as you know the effect of inflation is

very significant and it can cause many changes in monetary

dangerous for an economy as we've seen in in Germany. So

stable to to have a thriving economy and too high of a of

that means your 100, 000 has less purchasing power because

video inflation could be you know it needs to stay quite

issue. As you as we discussed briefly in the economic train

policies of a country to try to try and change deal with this

cost of products increases and vice versa as well. So you see

10% so that means if you were to buy something that costed

100, 000 this year but next year it would cost 110, 000

how we just said it decreases the purchasing power of a

you've got 100, 000 right now and then inflation increases

currency. To frame that in your mind let's just say for example

inflation, they've always got a lower currency. Uh lower cost

inflation is considered to be a 2% so countries banks will

inflation can lead to hyper inflation and that's very

around this level. If we see inflation become too high, the

doesn't matter which economy they're in inflation always

always keep an aim to keep will always aim to keep inflation

purchasing power of a currency. So the optimum level of

and services over time. It can be described as a decrease in

rate the rate of inflation is the change in prices of goods

exists So what is an what is inflation? Inflation is the

Forex and inflation is something that affects every

probably heard since you know you're in the the industry of

from GDP that we just covered right now we're going to be

single consumer around the world whether you know it

moving on to inflation now this is a term that many of you have

Yes hello everyone welcome to the next video so moving on

you in the next video.