How Important is Inflation?
Inflation is a state where prices continue to go upward as a result of overheated economic growth or too much capital circulating in the market with little opportunities to chase. Causes of inflation depend on many factors. One is when governments print an excess of money to deal with a crisis. Another is a rise in production costs and international lending and national debts. Inflation can also be caused by taxes added on various consumer products such as cigarettes or fuel. The current inflation rate of US is 4.20% as of January 2008, much higher from 2.85% of December 2007.