Cheaper Inflation Methods A
Even though high inflation has been a recurring problem for several hundred years, there still aren’t enough solutions across the world for inflation.
Therefore, what are ways to add %s to more specific, less painful methods than the current inflation reducing methods?
Suppose there are up to 100,000 puzzle pieces for solving inflation, and suppose that each time we create a puzzle piece, we have a really high probability of connecting that puzzle piece to the right puzzle pieces.
As we add more puzzle pieces, how do we end up with the 50 best solutions to inflation that are achievable enough?
Please print this page (double sided) to keep as a resource…
Please also make sure to have a look at the other articles in this series, because some large %s of methods are suggested, and some could be really helpful.
So how do you solve inflation? And what are puzzle pieces to help find 50 types of gentler inflation solutions?
What is preferred- higher interest rates or higher inflation?
The ideal would preferably be neither.
So how do we solve this? This series of articles is about solution %s and puzzle pieces to help solve this.
The interest rate now is similar to 2007 to 2012 levels.
However, what needs to be done to prevent it from going much beyond this, for people’s sakes?
Methods that could move this forward will be explored in the next several articles.
Central Banks say that interest rates are returning to pre-pandemic levels.
So this is probably needed, e.g. making loans is a business, and the people who do this need enough profits.
So interest rates returning to pre-pandemic levels would be fair enough and expected.
However, you feel sorry for people who didn’t know anything about finance and bought houses or got loans at the lower interest rates. Yes, it’s true that they got a year or so of much lower payments.
But at the same time, a lot of people might not have factored in that interest rates would change, especially people who didn’t know much about finance.
Can the government be asked to create special schemes for mortgage holders who are in trouble?
The people most affected by high prices would be poorer people, because they have less extra income to spend on inflation. Please make sure to have a read of Articles B, C and D, because they talk about methods to reduce prices and slow or stop interest rates.
Central Banks’ thinking on this is probably that people who can afford mortgages (or loans) tend to be stabler and wealthier on average. So they are better placed to afford interest rate increases than poorer people who must buy groceries, electricity, etc.
But it would be better if there were ways for interest rates to go to pre-pandemic levels and not higher. This really depends on if there are enough solutions for inflation.
While it makes more sense to find methods to lower society-wide spending on specific inflationary products, asking everyone to lower spending overall is probably also 20%+ of the solution.
However, too much decreased spending on everything causes more risks of a recession- and this is problematic for poor people and for all other people.
So decreased spending on specific inflationary products should be the largest factor, with decreased overall spending a backup factor.
Also, even if the average mortgage holder can afford higher interest rates, a % of mortgage holders might struggle because of this, so any ways to help them (especially %s and methods to lower prices before interest rate rises) would be really appreciated by them.
Higher interest rates are also problematic for renters… if a landlord has a mortgage on a property (and a significant percent of landlords would), then they could be forced to pass this on to renters. If there is a tight rental market- and there is, in many locations, then this is problematic, because renters, who on average tend to be not that wealthy as homeowners, will have to pay higher costs.
So what are potential solutions to help with both slowing down interest rates and what they are trying to achieve- slowing down inflation?
Can governments please be asked for more assistance for the types of people who are struggling most from inflation?
This isn’t the overall solution but in the short and potentially medium term it might be needed.
What types of people need it more and what kind of help would be most useful?
For example, poorer people and specific types of people find it harder to afford goods and services. For example, students, people with problems and people with poor paying jobs.
Reviews into the complex reasons why would also be really useful, because the public can then create %s of solutions.
Could there be methods to let more people who need it become aware of the help that is available (e.g. public education campaigns for concessions and rebates)?
How many people who need it are aware of the methods?
Could organizations please be asked to help mortgage holders who are in trouble?
For example, it might be too expensive for householders to sell their houses.
Therefore, could it become way easier to re-finance and/or re-mortgage houses for a longer period of time so that mortgage repayments are cheaper? Householders will probably still be unhappy with higher interest rates but the above will make repayment costs cheaper.
What about renters? It’s a tight rental market in some large locations- there are low vacancy rates and if landlords with mortgages pass on higher rental costs, then renters would be forced to absorb this. So what are ways to solve this?
If people kept on building more apartment blocks rather than houses, this should ease, because there would be more supply of housing (e.g. 4, 6, 8 or 12 families could live vertically where one house might usually be). This would decrease rental rates substantially…
If there was a really strong focus on apartment blocks or apartment block suburbs (e.g. through council permits; please- where it doesn’t affect current houses), this would be a really, really, really helpful way to increase housing supply and decrease rental prices.
It could even become “the dream” to own an apartment in a nice area, because these are way more affordable and achievable.
Current building plans (and slowdowns or increases in this) would probably be strongly affected by expectations of future interest rates… so if interest rate rises were expected to stop soon (for the reason that inflation was getting under control), then people would start building again (because they would know the maximum interest rate to expect).
This means that people who could afford rates that would be reached soon but couldn’t afford higher interest rates would know they could build, increasing supply. At the same time, it would be important not to spook builders with too high interest rates forecasts.
Another potential reason for higher rental prices could be that everyone has moved back to cities or central locations, increasing demand for these locations.
Ways to spread purchasing demand over much wider areas would be another way to decrease rental prices. However, this would need to be a society-wide solution/ a cultural change.
Allowing people to work full-time away from the office would mean that they didn’t have to live in central locations, although they would need to have special business computers. Another option is popularising working from home and traveling to central locations one or two days per week so that people have long commutes on those days but no commutes on the other days. Another option is having two or multiple offices across the wider city, so that these offices were a lot closer to people’s houses. These could potentially decrease rental and house prices by people being able to move further out, reducing the demand on the inner suburbs.
It should also be noted that inflation also affects recessions in financial markets, because people take out money to cover higher prices and people have less money to save and invest.
Because of the lower supply in financial markets, most stocks decrease, affecting people who will retire within 5 years.
Therefore, it is a really good idea to find ways to get inflationary prices under control, so that people can start investing in financial markets again.
Any methods to keep all people highly interested in keeping money in stock markets is a good idea, although it shouldn’t be about convincing people to spend more money in stock markets- this should be their own individual choice.
It should be about convincing people to get more interested in stock markets in terms of time and opportunities (e.g. a couple of hours per week, looking for potential bargains).
But again- it shouldn’t be about persuading people to spend more money- this should be their own individual choice.
It should be about taking more of a weekly interest in it.
However, this needs to be in safe and ethical ways.
And it also needs to be done at the same time as lowering inflation, because when increased people put money in the stock market, the average share price increases. When a lot of people take money out of the stock market, the average share price decreases.
When inflation is happening, people take money out of the stock market to pay for inflationary products. When the pandemic finished, people also had reduced time and interest for the stock market.
Therefore, as soon as inflation slows down, to increase people’s time and interest with the stock market again- this means that people who will retire within the next 5 years will have their stocks and retirement funds go up again.
It should also be noted that stock market volatility is something that nearly all investors are thoroughly warned about before investing. But any ways to help people who will retire within the next 5 years would be really appreciated. However, to be really careful with doing this. It would be more about getting people safely >fascinated with the stock market rather than persuading them to invest more.
And the sooner that prices stabilise (and some start lowering using the methods mentioned in the next few articles), the sooner that interest rates can stabilise/ decrease too.
What are other %s to help solve inflation and interest rates?
Please also make sure to read Cheaper Inflation Methods B- this looks at how higher interest rates are attempting to influence purchasing behaviours around prices, and how to reach these behaviours earlier, before interest rate hikes happen.
Cheaper Inflation Methods C looks at supply side reasons for higher interest rates, like higher shipping costs, higher supply costs and higher component costs. Higher interest rates probably won’t be able to have much of an effect on these … however, what are different types of % solutions to help increase supply and reduce shipping costs?
Cheaper Inflation Methods D looks at other types of reasons for higher interest rates and summarizes some of the reasons from before.
Most Important: Part B
It seems that Central Banks raise interest rates for the specific reason of trying to change people’s behaviour around inflated goods and services.
However, if people knew how their behaviour was supposed to change around higher priced goods and services, and before incremental interest rate rises, then worldwide Central Banks would have much less reason to raise interest rates.
So if we knew what different types of people were supposed to do from interest rate rises, we could just keep trying %s to persuade different groups to do these, before interest rates increased each time.
But what do different groups- and people in general- need to do?
What do you think are the 20 behaviours that Central Banks would like to happen among spenders, businesses that have inflation, other groups, and everyone in general when they do interest rate rises? And how can we persuade people to do some or all of these before the next interest rate rise?
We could then choose 5 to 10 priority behaviours and help to influence for them before the next interest rate rise.
On the supply side, it is harder to influence high component costs, low supply, or high transportation costs, but it is still possible.
Please have a read of my demand and supply side behaviour %s and please add what you think %s could be (and why) too.
