Why are inflation rates what they are today?

What are some reasons the inflation rates are what they are today??? I need actual economical reasons. Thanks so much! : )

Why are inflation rates what they are today?

Inflation is tied to excess money (debt and currency) supply.

Most money is created via private loans. The Federal Reserve%26#039;s job is to make sure the private world keeps loaning money. %26quot;Open Market Operations%26quot;, %26quot;Reserve Requirements%26quot; and the %26quot;Discount Rate%26quot; are the Federal Reserves tools for keeping the money flowing. Federal injections of money (by any of these means) equate to future inflation.)

The market goes down because injections equate to inflation and the people with money to invest are concerned that future inflation (coupled with taxes) will outpace there benefits from investing in a business activity. The investors are moving to real items (such as gold). Therefore, when the fed lowers rates, the private loans continue to shrink and jobs shrink. This is what is known as stagflation (interest rates and unemployment both increase).

Here is a good description of how the Federal Reserve manipulates the economy: http://www.a2dvoices.com/realitycheck/ma...

Why are inflation rates what they are today?

We have been borrowing heavily, the value of the dollar has fallen.

to just look at the fallen dollar value explains enough of it.

look at oil, only traded in dollars internationally.

So lets just say $1 = 5 Saudi Riyal

Oil was $60 a barrel, so the Saudi made $300 Riyals per Barrel

Now lets say the dollar has fallen by 1/5 of value in last few years. so instead $1 =4 Saudi riyals then for the Saudi to make the same amount for his oil has to charge $75 dollars for the same oil. So we of course are paying more to buy it.

Well the dollar has fallen by more then 1/5 in last few years so naturally the above has occured even more so.

Oil though is not used in the inflation index, yes it ends up in all our products (transportaion costs), but we measure inflation based on prices to consumers so when the higher transportaion costs and any other reasons business must raise their prices actually end up causing the price to the consumer to go up then we count that rise as inflation.

So oil hikes, hits the pumps, and sooner or later also hits the groceries, and everything else. that is a source of inflation, then It costs more to heat your home and drive to work so you ask the Boss for a raise (and we raised minimum wage so even the lowest paying jobs are getting a raise), Labor costs go up, which again makes the Boss to raise prices to make the same profits, so another source of inflation. The rise in utility bills hits everyone so another source. The store rents the building the owner of the building is paying more for his groceries/utilities gas at the pump so he raises the rent: another source.

You can see it will snowplow through the economy which is why the FED normally will target interest rates to keep inflation under control as a top priority, and normally even at the expense of economic growth.

I%26#039;m saying normally as inflation was starting to rise and so the Federal reserve ws raising interest rates, but when the economy stalled so fast in the 4th quarter, they then switched and now are trying to stimulate the economy by cutting rates even though the inflation numbers do not look good, so they are Gambling that they will be able to get growth going and then be able to get inflation under control later. ???

Why are inflation rates what they are today?

It%26#039;s part crack-up boom, part dollar devaluation and part emerging market demand.