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Good and bad inflation.


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Inflation is decreasing the value of the currency. Sometimes some people say that inflation makes the interest of loans negative. That means the value of the currency drops so fast that the interest of loans cannot cover the loss of the currency's value. Maybe that thing is good for somebody, but that is a bad thing for banks. The interests of loans are meant to cover the expenses of the bank. 

So when the bank would not get what it calculated, that thing means that those negative interests are left as bad debt. The thing that if the private person gets to benefit from the loans of the inflation person requires the inflation adjustments for the incoming. 

The problem with inflation is that it affects the prices of every product. Inflation is increasing prices. And another term for that thing is that costs of living increasing. There is the tale that little inflation is tolerated and helps economics. Of course, that thing can be true. But that requires that people have currency loans. Or they can change their currency whenever the value of a currency is changing. 

When we are talking about the loss of the value of the currency, we can talk about two types of inflation. Normally inflation means the loss of the buying force of money. So the value of the currency is lost internally. But the value of the currency is stable to other currencies. 

In another version of inflation, the value of currency turns weak. In comparison to other currencies. The phenomenon is similar to devaluation, but that thing happens spontaneously. Term devaluation means that the outer value of currency turns weak in purpose. But the spontaneous devaluation where the currency loses its value spontaneously can describe as "outer side inflation". 

Controlling the changes in the value of the currency is the key element in economics. The inflation adjustments are the interesting thing. But they can accelerate inflation. The major reason for inflation is that. There is too much cash or free money in markets. 

So inflation adjustments can mean that the central bank just makes more money for the markets. And because there is less other property the value of money will decrease because there is more money for the property. 

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