How to stop Inflation?

Only one of us can't stop inflation but if we work together, it will happen faster than government trying to push the inflation down.

The main reason, Central Bank increases the interest rate is to stop people from spending their money.
But isn't it spending good for economy?. Yes it is but if you spend when there are shortages of foods, fuels and other essential items, it is going to hurt the economy. How? if you keep spending your money, things are going to run out of stock and supplier can't keep up the flow so prices are going to go up. and you are going to buy it anyway because you like to spend it and you have lot of money so prices are going to go even higher. If that cycle continues Inflation is going to go out of control.

People are not going to listen to each other when it comes to spending so the only trigger Government have is to increase the interest rate so your borrowing power goes down. So, if you can't borrow from the bank when you run out of money, you will stop spending. That way there are less demand for goods which leads to price decrease. And then slowly things will come to the normal point.

Take a look at this charts:


Inflation controlled by government sooner:


And out of control:


So the bottom line is - stop spending.


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