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Question: governments of the world agree we have recesion!. what is the problem about inflation !?
if all our so called standards of living are going down and no country in the world has the upper hand over inflation there is surly no problem as we should all agree on a coarse of action that is "Business as usual" because by any argument we are all in the same fix!. is there anyone out there who hasn't got his head up his bum! any comments please, as i don't understand the "panic"Www@QuestionHome@Com


Best Answer - Chosen by Asker:
Business as usual means this:
-Consumers are buying stuff instead of holding onto their money!.
-This support businesses, who can use that money to pay their workers!.
-Indirectly, these actions show investors that companies are doing well, thus they're more willing to buy stock in the companies!.
-Banks are willing to make loans to people, as jobs look stable; and to businesses that wish to expand, as they're reporting steady profits!.

This is a good thing!. The reason the recession is coming up so fast is *because* business as usual isn't happening!.

-Consumers, instead of spending, are nervous, so they're saving their money in fear of losing their jobs and retirements!.
-Businesses, seeing that consumer confidence is low, is losing profits!. Expansion plans are put on the shelf, thus driving down the demand for labor!. Some people are losing their jobs to keep the businesss afloat!. This makes the people nervous!.
-Investors are watching profits plummet, so they're pulling out their investments before the stocks get any lower!. This makes retirement savings take a hit, which consumers get scared about!. It also takes money away from businesses, hurting them even more!.
-Banks, too afraid to make loans to businesses and consumers that likely won't be able to pay them back, are stockpiling cash instead of making the loans they would normally make!.

In short, the goal is to get back to business as usual!. What nobody agrees about is how to get back to that state!. Many governments are approaching the financial institutions, hoping to ease their concerns by helping them have the confidence to make loans, but most people are realizing that a multi-pronged approach will be needed over time!.

Inflation is occuring right now because transportation and food prices are rising at fast pace (although the former has been easing significantly lately)!. These higher costs raise the costs of operations for virtually all businesses; thus, prices rise everywhere you look, yet the checks for wages that people receive aren't getting any bigger!. This was already happening and is not *directly* tied to the recession itself!. What I mean by not directly tied is that, while the ties that do exist did make the recession hit more quickly, the inflation would have occurred even without these ties!.Www@QuestionHome@Com

inflation is only relative !.!.!. if there's inflation everywhere, then there's really no inflation, since prices would be increasing by the same rate all over, hence no one place becomes relatively more expensive than elsewhere!? of course, the banks wouldn eed to print a ralatively increased amount of notes, and employers would have to pay more in proportion to inflation also !.!.!.Www@QuestionHome@Com

Ask Mr King who is still worried about inflation when there is noneWww@QuestionHome@Com