Inflation reaches a maximum in decades in the US and the reaction of the experts has not been slow to be noticed. The monthly report of the Consumer Price Index (CPI) for the month of March has been forceful from the United States Bureau of Employment Statistics (BLS) revealing a Record ceiling in annual inflation of 8.5%, the highest in 41 years in the US.
What is inflation?
In economics the term Inflation refers to the increase in prices of goods and services over a period of time. one year being the usual reference. This concept can also be defined as decrease in the value of money in relation to the goods or services that can be acquired with said money.
For example, Going by bus between the cities of Madrid and Barcelona currently has a price and, over time, due to inflation, the monetary value of this service under equal conditions (same type of bus, same company, same route or similar, etc. .) tends to rise. The same happens with all services or products, there was a time, a decade ago, when cinema tickets in Spain barely touched 5 euros, but today it is rare to see them at such a low price outside of the day of the spectator (Wednesday ) or occasional promotions such as the film festival; the current price ranges between 8 and 11 euros. This is inflation in daily life.
Why is high inflation not good?
From this fact it follows that for those who see their salary frozen in timethat is, that does not increase, do not rise or do not depend on variables are the most susceptible to this phenomenon since every year their purchasing power decreases.
The monthly increase in inflation in March was 1.2%, taking that month’s annual inflation rate to 8.5% compared to March 2021, the fastest acceleration since 1981. Food and energy surges exacerbated by the Russian invasion of Ukraine have worsened the adverse effects of this situation.
But the impact on consumers is much greater than 8.5% in basic necessities such as food, rent, etc. Gasoline rose 18.3% in March alone dragging several industries that depend on transport in notable price increases. A) Yes, food at home increased 10% in Marchthe highest increase in the past year.
Could High Inflation Affect Bitcoin?
Inflation does not bring benefits to the general public. Although multinational companies can mitigate the effects of this economic phenomenon, the small consumer is plunged into all this maelstrom. In this context, the lower purchasing power of individuals can keep them from buying cryptocurrencies. Although higher inflation does not necessarily imply a fall in Bitcoin, it can wreak havoc and slow down markets, which have been dormant and at lows for months after the last ATH..
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