Jean Francois Desormeaux Reviews the Impact of Inflation in the Current Environment

The past two years have been difficult for individuals, families, and small businesses. The government has made an effort to ease the stress on everyone.

LAVAL, QUéBEC, CANADA, December 22, 2021 /EINPresswire.com/ --
The past two years have been difficult for individuals, families, and small businesses. The government has made an effort to ease the stress on everyone by passing stimulus packages that put money in the pockets of spenders. Unfortunately, one of the impacts has been the dramatic rise of inflation. Jean Francois Desormeaux is here to discuss the impact of inflation from multiple perspectives in an effort to educate everyone on this financial concept.

Reduced Purchasing Power

Jean Francois Desormeaux shares his expert insight explaining that one of the most common impacts of inflation is reduced purchasing power. Inflation takes place when the cost of goods and services increases on average. For example, the price of a gallon of milk has increased significantly during the past 70 years. Because inflation causes the average cost of goods and services to go up, the purchasing power of a single dollar reduces in value. In essence, people cannot purchase as much for a dollar today as they were able to 20 years ago. This reduced purchasing power can make it difficult for families to put food on the table, pay their bills, and put their kids through school.

Increases the Cost of Borrowing

Furthermore, Jean Francois Desormeaux believes that inflation occurs when there is a lot of money in the economy. Because there is more money to go around, more people are able to purchase goods and services, increasing their demand. As a result, prices go up. Because the government usually tries to stem inflation by raising interest rates, it can be more expensive for people to borrow money. For example, people may need to pay higher interest rates if they would like to take out a loan for a car or a house. Even individuals with good credit scores might have to pay higher interest rates to borrow money.

Encourages Spending

In addition, Jean Francois Desormeaux explains that inflation encourages people to spend money. Many people believe that a low inflation rate is a sign of a healthy economy, as deflation leads to a reduction in the price of goods and services. If people believe that goods will get cheaper, they may not spend money right now, waiting for prices to come down. On the other hand, if people believe that goods will get more expensive over time, they will be more likely to purchase them right now. For this reason, inflation could encourage people to spend more money.

Looking to the Future

In the end, inflation is a serious phenomenon that impacts individuals and families everywhere. As inflation increases, the cost of goods and services becomes more expensive, making it difficult for families to make ends meet. Furthermore, the lower end of the price spectrum goods tends to rise in price more quickly, meaning that low-income families are typically hit harder by inflation. In addition, because these families are already purchasing the least expensive goods, they don't have a lot of wiggle room to save money. Jean Francois Desormeaux seeks to educate everyone on financial concepts, including inflation, to prepare accordingly.

Jean Francois Desormeaux
Jean Francois Desormeaux
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