“Elisha replied, “Hear the word of the Lord. This is what the Lord says: About this time tomorrow, a seah[a] of the finest flour will sell for a shekel[b] and two seahs[c] of barley for a shekel at the gate of Samaria.”
2 Kings 7:1
Inflation. A word most everyone knows well. An economic indicator of how prices rise over time, but why does it happen? A simple explanation is that there is more money in the economy than what it can be spent on. This lends itself to the idea that businesses will raise their prices because they are running out of product that is bought rapidly. The Fed wants inflation to remain at 2% per year.
The Fed, or central bank, supervises the economy. They are in charge of all the rules that banks in America must obey. One indicator that they can influence is known as the interest rate. That is the interest rate that banks can borrow overnight from each other. Even though it does not directly affect consumers, this interest rate lends itself to the interest rate that people use to borrow and spend because commercial banks will increase their interest rate to have people borrow to make it worth their while. When the Fed increase the interest rate, inflation slows because less people are borrowing and spending money. The current interest rate of the Fed or “Fed Rate” is 4.83%.
During the siege of Samaria, prices raised so high that droppings from birds were only affordable to the rich. God promises complete economic revival for the Samarians in this 2 Kings passage, and he delivers. That night, the army of the Syrians (who are lying siege to Samaria) hear noises of horses, chariots, and a great army. They are convinced that the Hittites and Egypt have formed an alliance to attack them. They fled at twilight in a hurry. In this example, he uses the prices of items to reflect his control and dominion.
Folger, Jean. “What Is the Relationship between Inflation and Interest Rates?” Investopedia, Investopedia, www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp. Accessed 26 July 2024.
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