Hyperinflation In The United States

The word inflation when brought forth, immediately can make the average American shriek. Inflation is defined by a sustained increase in the general level of prices for goods and services. With inflation being an everyday word in our world its hard not to wonder what the causes are for inflation. There are multiple factors that play a role in causing and contributing to inflation and the complications that come with it along with various ways to additionally overcome inflation. Inflation is caused by numerous factors, some of which being more utilized than the other. The number one and most notorious inflation factor for the U.S. is overspending by the government. This factor arises when the government borrows more money than they have to

Zimbabwe overprint caused a currency spike of over 1,700%, resulting in “100 trillion banknotes”, this hyperinflation ultimately resulted in the abandonment of local currency. When a government overprints on purpose, it is called “Seigniorage.” Another example of how inflation can strike a country is through natural disasters or wars. Upon these instances, hyperinflation can take form due to governments spending crucial amounts while engaging in war or disaster relief. Once the damage has been done on the bill after these events, its hard for governments to repay the sum of money because they had to print more money to support the war or disaster then they had in the first place. Federal minimum wage is another factor of inflation. When the minimum wage increases in a country, any and all types of business are affected in one way or another, this is because the companies respond to the higher minimum wage by raising the prices of their goods and/or services to adjust for the inclining wage. A primary method to overpower inflation in economies would be the shock therapy method. The shock therapy method consists of multiple layers starting with ending price controls, the privatization of publicly owned entities and trade