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  1. 1. What are these cryptocurrencies?
  2. 2. Bitcoin - the story of a technological revolution
  3. 3. Satoshi Nakamoto, who is the creator of Bitcoin?
  4. 4. Vitaly Buterin – the creator of Ethereum
  5. 5. What is blockchain, and how does it work?
  6. 6. What is an NFT token?
  7. 7. What is money?
  8. 8. Cryptocurrencies vs fiat money, which will win?
  9. 9. What is DeFi (Decentralized Finance)?
  10. 10. DeFi: opportunities, advantages and disadvantages of decentralized finance
  11. 11. What is an altcoin?
  12. 12. Stablecoins - What are they?
  13. 13. Cryptocurrency wallet - what is it?
  14. 14. Why do we talk about bull and bear markets?
  15. 15. Security in the crypto market - what rules are worth following?
  16. 16. What is the seed phrase in cryptocurrencies?
  17. 17. Dogecoin and memecoin - what are they?
  18. 18. What is a Ponzi scheme?
  19. 19. What is a Soft and Hard Fork?
  20. 20. Blockchain - examples of use
  21. 21. Is blockchain safe?
  22. 22. What are the types of blockchain networks?
  23. 23. What is blockchain network congestion, and how does it work?
  24. 24. Cryptocurrency wallets: Hot Wallet vs. Cold Wallet - key differences!
  25. 25. Cryptocurrency wallet diversification
  26. 26. Halving Bitcoin - what is it, and how does it affect the price?
  27. 27. Blockchain versus databases: key differences!
  28. 28. How do you transfer cryptocurrencies?
  29. 29. The most important cryptocurrency acronyms/slang you need to know!
  30. 30. The memecoin story: madness or great investment?
  31. 31. What is Ethereum? 
  32. 32. Everything you need to know about gas fees in Ethereum!
  33. 33. Gavin Wood: Blockchain Visionary and Co-Founder of Ethereum
  34. 34. Decentralized Apps – what are they?
  35. 35. What is Proof of Work (PoW) and what is Proof of Stake (PoS)?
  36. 36. What is the Proof of Authority (PoA) consensus mechanism?
  37. 37. What is Proof of Burn (PoB)?
  38. 38. What is a whitepaper? What is its purpose, and how do you write it?
  39. 39. Smart Contracts - what are they?
  40. 40. Know your customer (KYC) and Anti-money laundering (AML) what are they in the cryptocurrency industry?
  41. 41. Blockchain and NFT games - how to make money on them?
  42. 42. Liquidity in the cryptocurrency market
  43. 43. Inflation and its effects on financial markets
  44. 44. What is stagflation and why does it have a negative impact on the market?
  45. 45. What are utility tokens and what use do they have in the cryptocurrency sector?
  46. 46. What is cryptocurrency mining?
  47. 47. What is the mining difficulty?
  48. 48. What is compound interest, and how does it work?
  49. 49. What Are Privacy Coins and Are They Legal?
  50. 50. What is CBDC - central bank digital money?
  51. 51. What is Cryptocurrency Airdrop all about?
  52. 52. Key differences between ICO, IEO and STO
  53. 53. What are decentralized DAO organizations, and how do they work? What are DAO tokens?
  54. 54. What is EURT? How does it work?
  55. 55. What is the difference between Circulating Supply and Total Supply?
  56. 56. Snapshot from the world of cryptocurrencies - what is it?
  57. 57. What is the Fear and Greed index for cryptocurrencies?
  58. 58. APR versus APY: what is the difference?
  59. 59. What is an Initial Farming Offer (IFO)?
  60. 60. What is Regenerative Finance (ReFi)?
  61. 61. Who Is Craig Wright, the Alleged Creator of Bitcoin?
  62. 62. What Is Bitcoin (BTC.D) Dominance?
  63. 63. Michael Saylor, Self-Proclaimed Bitcoin Maximalist
  64. 64. Bitcoin Pizza Day
  65. 65. AI blockchain - a new look into the future?
  66. 66. What is WorldCoin? Everything you need to know about this cryptocurrency!
  67. 67. Azuki NFT collection guide: everything you need to know about it!
  68. 68. The 10 most expensive non-fungible tokens (NFTs) ever!
  69. 69. The Bored Ape Yacht Club (BAYC) - the story of the popular NFT collection!
  70. 70. CyberPunks - the story of the most popular NFT collection in the crypto industry!
  71. 71. NFT Art: The digital art revolution - history and examples!
  72. 72. Who is Changpeng Zhao, CEO of Binance?
  73. 73. Who is Brian Armstrong - CEO of Coinbase?
  74. 74. Who is Galy Gensler and the SEC? How does the Securities and Exchange Commission (SEC) affect the cryptocurrency market?
  75. 75. Web3's most popular social media platforms! Will they replace the platforms we know?
  76. 76. What is IoT - the Internet of Things?
  77. 77. On-chain analysis in the cryptocurrency world: Everything you need to know about It
  78. 78. Can you pass on your cryptocurrencies after death? How do you pass on a cryptocurrency inheritance?
  79. 79. What is the Howey test? What application does it have in cryptocurrencies?
  80. 80. The use of blockchain technology in the world of sport
Lesson 43 of 80
In Progress

43. Inflation and its effects on financial markets

The current situation of market prices makes most of us come across the concept of inflation. Today, that’s what we’re tackling. What is inflation, and how does it distort the functioning of the market? What does this one mean indicator?

Inflation – definition

Inflation, it’s nothing more than a price increase in goods and services. In real terms, we buy less than, for example, in the previous year. From an economic perspective, it is then inflation, that is, a decrease in purchasing power of money. What does this force actually mean? It is the ability of money to purchase the above-mentioned goods and services. During inflation for the same amount of money, we buy fewer things in the store, and we notice price increases in the store.

We wrote about money and its most important features here. It is worth recalling the most significant issues before moving on to the next paragraphs of today’s lesson.

It is then said that “something” took money from our wallet. Eventually, the amount we have decreases, on top of inflation, i.e. the increase in the price of goods and services. Then we encounter an increase in the money supply and the accumulation of one’s wealth in other tangible and material values.

It is worth noting that in the process of inflation, only one price does not suddenly rise. During this period, there is often discussed the phenomenon of continuous price growth and to average them, it is created by price indices. We are talking about a set of goods and services that are the most popular among consumers at a given moment and their prices are compared, for example, with the previous year.

Types of inflation

  1. Demand inflation (monetary) – the reason for the increase in prices on the market is definitely greater demand in relation to supply. She is also called monetary inflation because there is an excessive amount of money in circulation during this period.
  2. Cost inflation – the price of goods and services increases because the cost of production of the goods increases.
  3. Structural inflation – the production structure does not change in relation to the new needs of buyers.

Inflation types

  1. Creeping – occurs when the price increase does not exceed a few percent per year. It is minimally invasive and does not cause changes in economic processes. Creeping inflation can be controlled.
  2. Walking – prices increase by several percent, which causes a stir in the economic market.
  3. Galloping – we deal with it when the price increase on the market is already a two-digit number. Social and economic tensions arise (strikes). The economy is not growing and developing. An example may be double-digit inflation in our country and in the world.
  4. Hyperinflation – everything happens in the blink of an eye. Money loses its value rapidly, prices increase day by day. This is generally due to ill-considered budgeting of state expenditures by the government.

Causes of inflation

Among the most popular are certainly:

  • Too much money in the economy.
  • Lowering interest rates.
  • Quantitative easing.
  • State’s financial troubles.
  • The government has to pay a budget deficit.
  • Increase in employees’ salaries.
  • Increase in prices of energy resources.
  • High taxes.
  • Monopoly in the economy.


They are definitely deplorable. Inflation is never good for the state and its citizens:

  • Decrease in the value of money.
  • Decrease in the value of savings.
  • Economic activity is unstable.
  • Strikes.
  • Lack of motivation among society to change.
  • Higher nominal income.
  • Due to the high prices of energy resources, production is limited.
  • Difficulties in foreign trade.

How does the Central Statistical Office calculate the level of inflation?

To measure inflation, the Central Statistical Office uses the price levels of goods and services in two comparable periods. Additionally, it uses information on the structure of household expenditures. The data it collects from the Central Statistical Office, that’s over 200,000 prices per month. The whole country is being investigated.