Inflation: The Silent Thief That Can Steal Your Savings

Inflation is a phenomenon that affects the purchasing power of money. It is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of money is falling. Central banks attempt to limit inflation and avoid deflation, in order to keep the economy running smoothly.

When prices rise, the purchasing power of each individual unit of currency falls. For example, if the inflation rate is 2%, then a $1 candy bar will cost $1.02 next year. Over time, the effects of inflation can be…