I thought inflation means prices going upwards? Yes, you are certainly right but the truth is Inflation goes horizontal. See how my header banner of KLscape looks inflated, wide, and short. Whenever there is an inflation, prices goes up, it is widespread, and everyone’s budget remains short.
How much does a bowl of kuey-teow soup cost now? Its RM3.80 in a local coffee shop (aka restaurant). I remembered its only around RM3.30 beginning of 2008. That is RM0.50 increase or around 15% dearer. I tend to use food as an example as I think many people could relate to easily. In average, that could be lower but the situation is volatile as the issue of recession in US is looming, crude oil price is at a record high, etc.
So does your income improves by 15% just to cushion off this very little increase? If no, you are in trouble. If yes, you are okay but not getting better.
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