What it means is that during the good times, everyone is spending like crazy, which drive prices up like houses, etc. Because of that as well, the demands are also increasing but supply aren't coping fast enough, which normally after that, causes inflation.
Normally, your salary doesn't go up as fast as inflation rates though, keep that in mind. So, why is everyone so happy about the good times?
You're getting left behind in actual sense! The value of your money becomes smaller and smaller by the day. Think about it, how many candies can you buy in Malaysia about 15 years ago with RM 0.10? You can get 2 minimum, if lucky 4!! How many candies can you buy with RM 0.10 now? 1? Or not even 1.
With rapid inflation comes with recessions. In general terms, things just gone way too fast and recession is to do little "resetting". A lot of the world Governments today are trying to cushion the impacts of recession by having stimulus packages, bail outs, tax cuts, etc but is it doing real good?
In the short term, yeah it's good but in the long run, personally, I think it's damaging more than it's benefiting! Most of the prices, economy data and indicators are artificial numbers now. They do not represent actual state.
In recession, people like to call it the "bubble burst". With cushioning of recessions, the bubble are not really bursting. It just deflates smaller but not small enough. How many trillions can the Governments used to bail outs those banks and companies? How much trillions do the Govt has to stimulate its' people?
Where do the money come from? It's not like Governments around the world has a huge safe holding trillions and trillions of cash in case of emergencies! There're all debts, or in other words, they created money out of nothing. This is a big problem for future generations.
So me personally, I rather see bad times hit us harder. We need corrections in our lives to have it balance.
Anyway, that's my logic! :P
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