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The Aquilian

The Aquilian

Have you noticed inflation?

Inflation+appears+to+be+the+direction+our+economy+is+going%0A%7C%0A+https%3A%2F%2Ftownline.org%2Ffinancial-focus-should-inflation-affect-your-investment-moves%2F
Inflation appears to be the direction our economy is going | https://townline.org/financial-focus-should-inflation-affect-your-investment-moves/

Before I started taking AP Economics this year, it was hard for me to understand the true ramifications of inflation. A 2% increase in inflation? That is nothing, I thought; I will care when it is in double digits. However, I have been enlightened, a 2% increase is a noticeable change, and the 7% we have been experiencing is a life-altering deal. 

The way I try to understand it is on a large-small scale. So a 7% increase in price of  $2 is not a big deal. The price goes from $2 to $2.14, not a huge deal, but typical grocery shoppers do not buy a single lemon. It is not uncommon to go on a grocery run for a week and spend maybe $200. Then, the inflation becomes noticeable. A 7% increase becomes an additional $14 that someone has to spend, and that is not a lot of money, but it is an amount of money that could be used to purchase other home needs such as gas or a gift for a child. 

I live in the outskirts of Washington D.C. and drive to school everyday, and I have clearly felt the effects of inflation. All of the traffic and the fact that my car only takes 93 octane makes gas a resource I pay attention to heavily. When the price of 93 octane goes from around $4.20 to almost $6, that increase is something I clearly see and feel, especially in my bank account. That inflation is not limited to the lasting consequences of the pandemic; it is directly related to the Ukrainian War, which affects prices everywhere. 

We are already  feeling the effects of the war in Eastern Europe, but I am afraid that it is only the beginning. Russia and Ukraine produce a lot of the world’s most basic food and energy needs. Russia and Ukraine combined produce around 14% of the world’s wheat, and together they account for 28% of the world’s wheat export market. Additionally, Russia, most notably, produces tons of energy commodities, and Europe guzzles them down. Russia provided Europe with 60% of all of their energy needs. If Russia cuts the supply or sanctions of wheat or any energy resource, prices will undoubtedly soar, making inflation even worse world wide. That is my fear. We have a robust economic system, but after all of the government stimulation, I am afraid the economy could have a major recession due to all of this inflation.

Overall, I can definitely say that I have felt the hot breath of inflation. The Russia Ukraine war definitely did not start our inflation crisis, but it has worsened it. It has created a problem of rising prices with no quick solution for me and many other Americans. I hope that the Ukraine War can come to a peaceful end with economic stability regained, and I hope our lawmakers can find a way to quell inflation.

 

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