Tag Archives | inflation

Financial Buzzwords – do you know what they mean?

I was recently reading an article in one of the daily newspapers where the contributor was giving his insight into the ins and outs of our current financial difficulties. Problem was, he was throwing out words left right and centre that mightn’t always be known by everyone reading the paper. Here’s a few along the same lines that are worth knowing:

  • Inflation – The overall general upward price movement of goods and services in an economy (but then again, that’s an easy one).
  • Disinflation – A slowing of the rate at which prices increase. Typically, this occurs during a recession as sales drop and retailers are not able to pass on higher prices to customers.
  • Deflation – A decline in general price levels, often caused by a reduction in the supply of money or credit.
  • Hyperinflation – A period of rapid inflation that leaves a country’s currency virtually worthless.
  • Stagflation – High inflation and high unemployment (stagnation) occurring simultaneously.

It’s worth checking out any of those links if you want any further information.

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Why are RTE afraid of the word deflation?

Last week, figures released by the Central Statistics Office indicated that Ireland had entered a period of deflation – the aggregate price of goods and services in the country had fallen (not food though as the National Consumer Agency didn’t really tell us).

So, yesterday, as I’m signed up to the RSS feed for the RTE Consumer news updates, there were three updates to this article published – the current version is here.

At 12.30, the headline was as follows:

Negative Inflation Rate for January

Then, at 17:30, the headline was changed (but the story remained the same) to:

Deflation hits econony: 1st time in 49 years

And finally, at about 21:30 last night, the headline was again changed, but back to the original:

First Annual Negative Inflation in 49 years

Deflation isn’t a dirty word, it’s just an unfortunate fact of life in Ireland at the moment.

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Inflation? What inflation?

According to the Times of London, there are certain things (in the UK at least) that have decreased in price in the last 12 months.

Their article, with some examples, is available here. These are the top 10 –

1. Mobile Phones: down 51%
2. Digital Cameras: down 50%
3. Flat screen TVs: down 40%
4. Home Cinema: down 36%
5. Apple MP3 Players: down 35%
6. DVD Players: down 33%
7. Fridges: down 30%
8. Camcorders: down 21%
9. Washing machines: down 18%
10. Dishwashers: down 10%

I don’t have any numbers to back this up, but I have a feeling that these price drops are also being experienced here also.

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