Info 1: inflation growth definition
Info 2: how inflation growth works
Info 3: inflation growth vs interest growth
Info 4: example of inflation growth
Matters:
Peter had lost about 5 percent value on his forex portfolio account all because of inflation growth.
The activities of printing more money or selling money lead to inflation growth.
Are inflation growth and interest growth are same?
Opening information:
Inflation growth sentence breaks into two words inflation and growth, inflation means high supply of one Currency, and growth means increase.
Inflation growth means a high supply increase in one country’s currency, so now let’s have a look at inflation growth, how inflation growth works in the public market, and what the difference between inflation growth and interest growth is, finally one clear example of inflation growth.
Info 1: inflation growth definition
Peter is a forex trader, who has made a living through forex trading for almost more than 6 years and he was 32 years old before he became successful.
However, over the past three years, Peter Forex’s account portfolio had grown over 23 percent on average and the government also printed 3 percent more money average over the past 3 years.
And also his country’s money supplies increased by 2 percent on average over the past three years because more Investors sold their Currency holdings. Totally their is 5 percentage increase in supply of Currencies over past three year.
Here Peter’s Forex account portfolio had grown only an average of not 23 percent indeed it’s 18 percent alone because the total average of 5 percent increase in the supply of money over the past 3 years had decreased the return rates of money value over five percent in Peter Forex’s account.
This 5 percent increase in the supply of money is called a five percent inflation growth average over the past three years.
For this reason, when there is an increase in the country’s currency supply to the previous year, such an increase in supply is known as inflation growth. So now let’s dive into how inflation growth works and is involved in the public market.
Info 2: how inflation growth works
Inflation growth doesn’t represent any of the single amounts of numbers and objects instead the context that helps identify the one country’s value decreasing of the currency.
The value of any currency is determined by the supply and demand of money from one country, if more people buy and hold the currency of one specific country.
Therefore after the determination of one place’s Currency, the determination of one time to the other period of supply and demand impact makes the inflation growth.
There is no inflation growth, and the activities of printing more money or selling more already purchased money decrease one Currency’s value.
Whenever there is a consistent decrease in the value of the currency in one nation would lead to purchasing a dollar product for two dollars and a dollar product for a dollar product.
At the same time when there is a consistent increase in the value of one country money would also lead to opposite things by purchasing a one dollar for half dollar, and a dollar product for 1 dollar extra…
The increase and decrease of the difference in price changes while division shows the growth rate of one government money for the purchase of anything in the market.
Now we know that inflation growth influences the product purchase in the business market, which also influences the public securities purchased in the market too.
This means the Investor needs to spend 100 dollars for 90 dollars shares or 90 dollars for 59 dollars shares. On the other public Investors also face a problem with returns on their Investments.
Getting 20 percent returns is like a 16 percent return and 30 percent returns is like 20 percent returns because of a 4 percent and 10 percent inflation growth rate over 2 years and 10 years.
Most people confuse inflation growth and interest growth, so let’s jump into the key difference anyway.
Info 3: inflation growth vs interest growth
The difference between inflation growth and interest growth is, that inflation growth is the one which refers to the supply impact of one country’s currency.
On the other side, interest growth represents an increase in the amount of money which are charged from the loan and debts.
So the key difference between the inflation growth and interest growth inflation growth came from the currency and interest growth came from debts.
To make you more clear about the inflation growth, let’s see one clear example below.
Info 4: example of inflation growth
Say company F is the one which is paying 2 million dollars more compared to the past 4 years’ debts.
And the same company F are the one which spending 34 million dollars for same cost of goods when compared to the last 6 years with 30 million dollars. Here 34 million the inflation growth and 2 million show debt growth.