Inflation has arrived, but it's in disguise

Coingoback" srcset=" 700w, uploads/2021/06/Banner-Coingoback-700x150-1-300x64.jpg 300w, 150w, 585w" data-sizes="(max-width: 700px) 100vw, 700px " width="700" height="150" style="display: inline-block;"/>“You can ignore reality, but you cannot ignore the consequences of ignoring reality.”, Ayn Rand.Inflation in Brazil and in other major economies around the world it has been a hot topic lately. Even so, many people cite that they have not yet seen big differences in the prices of everyday products. Others mention that an IPCA of 4.52% in 2020 is the IPCA target of 5.8% in 2021 does not indicate that there have been large increases in prices recently. 2 points to be mentioned in relation to this: the first is that the IPCA is an index that measures an “inflation average” for each product and, therefore, does not reflect a single and objective truth for prices in general. The second point, and perhaps the least commented upon, is that the effects of the rise in inflation are not only felt in prices per se. For producers of goods and services, another way to apply inflation in practice is to, instead of increasing the price of a product or service in question, decrease the quantity of that product or service, charging the same price per he. In other words, instead of making a product more expensive, the supplier sells a smaller volume of the same product, and keeps its price equal to what it was before. This phenomenon is known as shrinkflation, and Brazilians are increasingly realizing this when they go to supermarket. Using a real example, from a supermarket in Ceará, powdered milk showed a slight increase in price, while the size of its packaging decreased.<img src=New weight of powdered milk packaging: from 800g to 750g, a reduction of 6.3% (years ago, the same packaging contained 1000g (1kg). Other products still have the original version, but they are increasingly investing in offering options smaller to supposedly have a more affordable price.Small potato chip packaging.Look at the size of this potato chip package. That's right, it costs R$ 6.29.

Inflation did not come by surprise

Recently, a video of the retired Suzete Maria da Silva crying in an interview with Rede Globo, went viral, commenting on the high food prices. It's painful to know that the difficulty in acquiring essential items only increases. “It's all very expensive, we don't know what to do anymore, we come shopping and don't know what to buy. We can't buy more meat, because the money is not enough. I'm retired and I'm still working”, lamented Suzete. Inflation, however, has not started to be felt by the population now. In a video from February this year, survivalist Avelino Morganti showed that this phenomenon was already observable on supermarket shelves. One of the clearest reasons for this, Austrian economists argue, is the increase in the monetary base. With the arrival of the Covid-19 pandemic, the liquidity crisis in the world gave way to a wave of money supply and negative interest. In just one year, central banks around the world were able to pump $15 trillion into economies. insist in asserting that this is necessary and that there is no risk of inflation, reality shows the opposite. In practice, the government injects money with one hand and takes it out with the other (through inflation).See too:Collaborated with the writing of the article Cláudio Brito.

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