Tuesday, June 17, 2008

Battle with Inflation

Our inflation rate has risen from 3% to over 5% after new petro price. There is no exception regardless whether you are student or worker. As this is just started, you will soon feel the impacts of how does it changed your life.

The meaning of Inflation is a rise of the price of goods and services over time, in other word is decrease in value of the unit of currency.

Our inflation generally caused by high crude oil and food price. The trace of the problems is believed due to the US Federal Reserve decreasing interest rates, so that money is no longer a means to preserve wealth over the long term. Investors invest in food commodities, which causes an increase in demand and therefore push the price higher. But of course, growing population and economies in Asia are factors too.

Saving is definitely not the method to against the inflation. No matter how much saving you have in banks, your FD interest will not catch up with Inflation rate. Value of money will depreciate over the time, and it will be too late until you realized it.

Keeping money is not the solution, instead, we need to keep assets that will appreciate over the time. Since this is not an investment blog, I will not go further into this. My next posts will discuss whether collecting toys could make us richer. So, stay with me, cheers. YeoCP//

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