Dear Members,

In the picture which is attach that mention the inflation crisis of Zimbabwe to get the idea about hyperinflation please go through from this link

http://www.picsopedia.com/images/mx4...98us5l0pvu.gif


Inflation

As a persistent and appreciable rise in the general level prices

Inflation types

• Creeping inflation
• Walking or trotting inflation
• Running inflation
• Hyperinflation

Creeping inflation

When the prices is very slow like that of a snail or creeper
Per annual increase is less than 3 percent

This is essential for the growth
In simple it’s good for any country

Walking or trotting inflation

When prices rise moderately and the annual rate is a single digit
Must 3 % to 7%
Or at least les than 10 %

Running inflation

When prices is rapidly like the running of the horse at a rate of speed 10 to 20 percent annum. It’s called running inflation its 1st condition of hyper inflation

10% to 20%

This inflation badly affected the middle class families
And Pakistan general inflation is lie in these digits

Hyper inflation

When prices rise very fast at double or triple digit rates from more than 20 to 100 percent annum or more it is usually called runaway or galloping inflation

In simple word uncontrollable price rises every day
Such inflation bring total collapse of the monetary system because of he continuous fall in the purchasing power of money

Pakistan food inflation digit is 22% lies in hyper inflation (only food)

There are few types of inflation like

Energy inflation
Non-energy inflation
Non-food inflation etc


hyper inflation is not in the reach of economists too

simple our economists failed to solve it
My Question is this that

Are we heading towards it?

Yes
No

With the reason

In Zimbabwe, 10bn now equals 1


HARARE, July 30: In a sign of Zimbabwe’s dire financial crisis, its reserve bank announced on Wednesday it was knocking 10 zeros off the country’s hyper-inflated currency — a move that turns 10 billion dollars into one.

Central bank governor Gideon Gono announced he was dropping 10 zeros from the currency, with effect from Friday. That comes a week after he introduced a 100 billion-dollar note which was not enough to buy a loaf of bread.

Gono said the new money would be launched on Friday with 500-dollar bills. He also said he was reintroducing coins.

Gono said the high rate of inflation was hampering the country’s computer systems. Inflation is officially running at 2.2 million per cent in Zimbabwe but independent economists say it’s closer to 12.5 million per cent.

Computers, electronic calculators and automated teller machines at Zimbabwe’s banks cannot handle basic transactions in billions and trillions of dollars.

President Robert Mugabe went on television immediately after Gono’s announcement to warn residents to shun illegal money dealings and profiteering. “Entrepreneurs across the board: Don’t drive us further,” he warned. “If you drive us even more we will impose emergency measures.”—AP

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Pakistan food inflation is in the digit of 32% which called hyper inflation

http://www.geo.tv/7-25-2008/u34533.htm

Respected Mr.Faraz,

i think there should be another word instead of hyper inflation.
but i don't know as i am not very good at linguistics

well here are some causes of hyper inflation;

1-The poor policies of former government.

2-Insenserity of politician as they theirselve are involved in black marketeing and smmugling.

3-Extravagent rulers.

4-We don't use our own energy sources because we don't want to take advantage of them like coal; we can produce power by the usage of coal but we go for an expensive source like oil and gass.
Only 1% electricity is produced by coal. Because of usage of expensive energy sources, the prices of all things are going high.

5-Lack of good planning.

6-Increse in taxes is also a major faoctor of hyper inflation.

7- There is no comsumer's right association in Pakistan so no one is there to complain about the hyper inflation. Even we pay charges for a world class products of multinational companies but they give us 3rd class and cheap products.
you can yourself compare the Shampoos with those shampoos which are brought by your relatives from abraod with the same brand.Iy happens because there is no one to ask them about consumers right.

8- Another major factor is "import" Our industries heve been ruiuned because of lack of power energy and inceased taxes.

9- Because of increased population there is a huge increasement in domastic demand.
Several supply and demand factors could be responsible for this surge in inflation. Supply-side shocks can cause large fluctuations in food and oil prices, effects of which on overall inflation, at times,can be so excessive that these cannot be countered through demand management, including monetary policy.

and so other causes.
the most of all we people are sleeping and dont like to wake up. so there is no one to ask out leaders about what the hell they are doing????

Regards

Zobia

Thanks for yours Participation I just carry yours idea bit further

Comparative advantage

Economics the ability of an individual or group to carry out a particular economic activity more efficiently than another activity

For example

Like IRAN must produce electricity through Oil because she has advantage in it

Pakistan use coal for energy because we have lot of mines in Pakistan it will be cheap and easy excess

Our current account deficit due to petrol last year was (14 Billion US $) total balance payment deficit was 19.7 US billion $ (BOP 2007-08)

Just because of the crude oil we suffer from deficit in our balance of payment

Now when we can get idea about it why not our politician go through from this lesson why we still using most expenses way to produce energy ( no idea why)

What these advisor doing
What PPP Economists doing (they are paying for it)
But no idea why they are not coming with bright ideas

Hyperinflation

In economics, hyperinflation is inflation that is "out of control," a condition in which prices increase rapidly as a currency loses its value. No precise definition of hyperinflation is universally accepted. One simple definition requires a monthly inflation rate of 20 or 30% or more. In informal usage the term is often applied to much lower rates.

There is only this word as far as I am concern. It is economic term hyperinflation


In my opinion there is only one cause that is good leadership

For Example: Peter the Great Russian I just explain it bit short (he was the son of King (died) of Russia which became USSR later because of PeterI)
He visited 10 years different countries and came back with along ideas after that he brings revolution in Russia through what he learnt from different countries (England, Germany, Europe etc)

Dear Faraz,

I know why our politician don't go for the better planning for the prosperity of country but i will send my post on monday regarding this topic.


regards

Zobia,

Asslamulaikum,

Dear Faraz, Only Economists can judge it properly, and they also know it very

well that how to manipulate the same circumstances.

But one thing every common person knows that our economical situation is

worst and it is in a state of quandary, and I don't know what will be the result

of the same circumstances that 1 Dollar has reached to 70 rupees, but the

devalue of 1 rupee is not able to be discussed.

You have nicely classified the same Inflation.

Regards.

__________________
I am he, whom I Love. And he whom I Love is I.

w.salam brother

Brother yeah! I agree with you that Economist evaluate much better than me

But I have done my master in Economics but I am still student

About

73 Ruppes = 1 $

It’s called exchange rate system

An exchange rate is the rate at which one currency can be exchanged for another

There are two type of exchange system

• Fixed/pegged Exchange
• Floating Exchange


Impact on inflation surely they have their own impact on economy as well as on inflation but there are many others things too

• Like our foreign reserve is decreasing
• Population increasing
• Liquidity of money in country
• Monetary policy
• Our own consumption pattern
• Role of balance of payment


Many others tiny points


@
Zobia

Thanks we will wait for yours posting