<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. It is the constant rise in the general level of prices where a unit of currency buys less than it did in prior periods. Often expressed as a percentage, inflation indicates a decrease in the purchasing power of a nation’s currency.</span></span></span></span></span></span></p>
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>Galloping inflation</span></span></span></b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>: When inflation rises to 10 percent or more, it wreaks absolute havoc on the economy. Money loses value so fast that business and employee income can’t keep up with costs and prices. Foreign investors avoid the country, depriving it of needed capital. The economy becomes unstable, and government leaders lose credibility. Galloping inflation must be prevented at all costs.</span></span></span></span></span></span></p>
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>Hyperinflation</span></span></span></b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>: Hyperinflation is when prices skyrocket more than 50 percent a month. It is very rare. In fact, most examples of hyperinflation have occurred only when governments printed money to pay for wars. Examples of hyperinflation include Germany in the 1920s, Zimbabwe in the 2000s, and Venezuela in the 2010s. The last time America experienced hyperinflation was during its civil war.</span></span></span></span></span></span></p>
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>Deflation</span></span></span></b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>:</span></span></span></span></span></span></p>
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>• Deflation is the general decline of the price level of goods and services.</span></span></span></span></span></span></p>
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>• Deflation is usually associated with a contraction in the supply of money and credit, but prices can also fall due to increased productivity and technological improvements.</span></span></span></span></span></span></p>
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>• Whether the economy, price level, and money supply are deflating or inflating changes the appeal of different investment options.</span></span></span></span></span></span></p>
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>• Disinflation is a temporary slowing of the pace of price inflation.</span></span></span></span></span></span></p>
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>• Unlike inflation and deflation, which refer to the direction of prices, disinflation refers to the rate of change in the rate of inflation.</span></span></span></span></span></span></p>
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:"Cambria","serif"”>• A healthy amount of disinflation is necessary, since it represents economic contraction and prevents the economy from overheating.</span></span></span></span></span></span></p>