Russia’s war on Ukraine is contributing to inflation in the U.S. — here’s how
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Inflation and recession are two economic terms frequently used by economists and politicians. They are often mentioned in the news, causing confusion among ordinary people. While they both have significant impacts on the economy, inflation and recession are two distinct concepts.
Let’s start with inflation. Inflation refers to the general increase in prices of goods and services over a period of time. When inflation occurs, the purchasing power of money decreases, and people need to spend more to buy the same goods as before. Inflation can be caused by various factors such as an increase in production costs, demand exceeding supply, or changes in government policies.
There are different types of inflation. Demand-pull inflation arises when the demand for goods and services surpasses the supply. This often happens during periods of economic growth when consumers have more disposable income. Cost-push inflation, on the other hand, occurs when the production costs for businesses increase. This can be due to rises in wages, raw material costs, or taxation. Another form of inflation is called built-in inflation, which is caused by expectations of future price increases. For example, if people anticipate higher prices in the future, they may demand higher wages, leading to a continuous cycle of price increases.
Recession, on the other hand, is the complete opposite of economic growth. It refers to a significant decline in economic activity lasting for an extended period. During a recession, businesses often experience decreased sales, leading to lower profits and potential job losses. This decline affects the overall economy, leading to reduced consumer spending and investment. Recessions can arise due to a range of factors, such as a fall in consumer confidence, stock market crashes, or financial crises.
It is essential to note that inflation and recession are often interconnected. Inflation can lead to a recession if price increases become excessive and unsustainable. When people experience a rapid decrease in their purchasing power, they are likely to cut back on their spending. This cascades into reduced consumer demand and economic contraction. Conversely, a recession can also impact inflation. During economic downturns, businesses often reduce production and lay off employees, reducing consumer spending power. This reduction in demand can cause deflation, where the overall price level of goods and services declines.
Governments and central banks play a crucial role in managing both inflation and recession. Central banks use monetary policies such as interest rate adjustments or open market operations to control inflation. They aim to keep inflation within a specific target range to maintain price stability. Governments also employ fiscal policies involving taxation, government spending, and stimulus measures to tackle recessions and stimulate economic growth.
In conclusion, while inflation and recession are interrelated, they are distinct economic phenomena. Inflation refers to a general rise in prices, whereas recessions represent a significant decline in economic activity. Understanding these concepts is crucial as they directly impact the overall well-being of individuals, businesses, and the global economy. By closely monitoring and managing these economic indicators, governments and central banks aim to strike a balance that promotes sustainable growth while maintaining price stability.
Really excellent and clear explanation.
FJB
I believe I should watch a video on "How to survive the current recession" given the circumstances. Really, it's a complete failure. That some people could still earn more than $408k in a short period of time astounded me. If that's the case, would you kindly elaborate?
Once Americans start feeling the impact of this recession, there will probably be massive crowds on the streets asking for peace with Russia.
We for sure heading toward the path of recession. Give it a few months.
Good luck citizens of the USA.
Democrat leftists are trying to figure out how to save Biden’s presidency
The price of gas is determined by the following factors…
.taxes
.distribution
.marketing
.cost of refining
Crude oil prices
Corporate greed
To the Trump haters: Are you happy now?
Recession :- sound like India
FJB.
Geez, so much misinformation being spread by this channel. FACT CHECK: I predicted the crazy high gas prices and this is just the start. This is just simple ECON101 stuff!
1. They mentioned Russia is the largest oil exporter in the world but failed to mention the USA only buys about 8% of it's oil from Russia.
2. They failed to note that continually cancelling pipeline projects has resulted in higher oil transportation costs for trucking in less oil that would have come in through the pipeline, reducing supply and thus increasing prices beyond the increased transportation costs for trucking in oil rather than having a pipeline.
3. They failed to note that continually advocating for shutting down fossil fuel power plants without having viable alternatives means there will be less supply and increasing demand, meaning oil prices may stabilize a bit but they will continue to go up well into the double-digits.
4. Buying electric cars won't help because they need to be charged with electricity from mostly fossil fueled power plants. As that demand surges, we will see the cost of electricity skyrocket.
5. China cuts the ribbon on a new coal-fired power plant EVERY DAY of the year. This whole reducing CO2 climate change goal is a fantasy and a myth.
5. Trying to reduce CO2 emissions cannot do anything but simply drive up the costs of energy as we produce less while demand and the world population competing for it grows.
Let’s go Brandon.
So 4% of our oil is from Russia, they blocked it less than a week ago.
And thats why we now pay almost a 100% more on gas?
Printing MASSIVE amounts of money, heavy restrictions/regulations, and relying on dictators for energy plays an important role.
Very misleading and vague.
Congratulations to V. Putin your invasion of Ukraine is an absolute Failure.
Thanks so much for the voiceover!
The US and NATO instigated the conflict. It's been using Ukraine as a proxy against Russia since the 2014 US backed coup overthrow of the democratically elected president of Ukraine. Russia is protecting itself from NATO expansion.
She forgot the fact that Biden has severely cut energy production in the US. Inflation was here well before Putin invaded Ukraine. So were high gas prices. Nothing has been done about the supply chain problems. And democrats solution to all this is try and spend more money and tell people to drive a 60k electric vehicle. Which does nothing to help with energy costs of heating and cooling your home. Not to mention people can't afford to eat right now let alone buy a new car. But nice try
You guys can't honestly believe inflation is happening because of Putin. The prices have been going up way before the invasion. Government spending is a bigger factor than Putin
So other words, Putin giving the finger globally!!
First