Explain inflation to a double digit IQ person please. What is

>>1572837
In short: Too much money chasing too few goods.

>>1572837
The more money you print the less value it has

Your employee wants a raise so you raise the price.

>>1572837

the price of groceries will be too damn high. put money in mutual funds. never ever save money in a bank at any interest rate.

>>1572837
prices go up over time. but so do wages, so really it doesn't affect you, except when markets bubble and rise above the rate of inflation

>>1572859
why not?

>>1573008
Shitty returns that don't even keep up with inflation, would be a good start.

>>1573019
where else then? hide it under the mattress?

>>1572837
Pretend you live in a world where there are only oranges and dollars. You can buy an orange for a dollar. All of a sudden everyone is give one million dollars but the number of oranges remains constant therefore the price of each orange will increase.

>>1573035
Did you read the whole post of the guy you replied to originally? If you need liquidity for an emergency fund, a money market account would be best. You can consider the lack of return as a premium on an insurance policy. Other than that, mutual funds are the best bet for most people who don't have the time to babysit their investments.

>>1572847
Not him but this literally never made sense

>>1572849
>>1572856
Both of these.

Borrowing money from other countries to "create" currency causes each dollar to be worth less, since there is interest that needs to be paid back on the dollar.

Another factor has to do with wage increases. Like that dollar menu at McDonald's? Easy for McDonald's to afford right now, may not be once they put in a federal minimum wage of $15/hr. Maybe it will turn into the $2 menu.

In either case, that $1 you have today is not going to be "worth" as much a year from now.

>>1573061
There is 3 money in a country and an apple costs 1 money. Now the countries prints a hundred money, the total money is 103, still 3 apples. What do you think happens to the price

>>1573086
"Printing" is often used too broadly and it's not exactly that simple. Money can be printed when a bond is issued that any investor(mostly foreign governments) that basically turns the dollar that is printed into a debt note. The other way it can(not always in this case) be printed is when a higher level money is converted into a lower level like M0(which is cold hard physical cash). There aren't stacks of physical cash for all the money the US has, most of it is virtual. Look up "money supply".

The more of something you have, the less it's worth

>>1573072
>Maybe it will turn into the $2 menu.
Lol McDonald's had to scrap the $2 menu in Australia because our minimum wage is so high. And the $3 menu just doesn't sound that cool.

>>1574411
Yeah but your dollars aren't worth a thing.

>>1574703
that's LITERALLY his point, my dude

Inflation is the natural push for money to be worth less and less as people push prices up, and people demand higher and higher pay.

Then there is a lot of money, and everyone has a lot of money, so it's not a big deal to have a lot of money so having a lot of money becomes equal to having a little bit of money.

which is why the gold standard is the best standard, instead of pegging it to Jewish speculation.

>>1572837

Inflation happens when the forex price of all other currencies on the planet rise, or drop slower than they normally would or should.

the result is that your purchasing power (based on your savings) is decreased.

>>1573072

except corporations trying to charge more and more, reducing product integrity by using less and less material and cheaper material, and pushing down wages is just as much of an impact as everyone asking for more money.

>>1574710
But they weren't worth anything to begin with so it's moot.

>>1573035
The problem with inflation is that the US dollar loses value the longer you have it, for reasons that are infuriating and you don't want to know about.

So leaving your money under the mattress loses value.

If your money works for you by being invested then it can make you money over time, and more importantly it can outrun inflation, thereby not losing you value.

You do risk losing money this way if you invest poorly though. The good news is that there are things like Index funds and Exchange Traded Funds, which are a simple way to have your money have approximately the same performance as the average of the rest of the economy. At least that's what they're designed to do. For instance the S&P500's ETF(Exchange Traded Fund) over the last 10 years has had an annualized return of around 7%, which means that on average over the last 10 years it has made 7% per year the last 10 years which outruns inflation nicely, since the highest inflation in the last 10 years was 4.1 percent. No value lost.

Fun fact about inflation, in Germany after World War I, the inflation was so horrendous that it took something like 20 trillion Deutsche Marks to buy a loaf of bread.

tl;dr Money loses value if left alone, you can take some risk by investing in order to prevent your savings for losing value.

>>1575016
what about compound interest?

Disclaimer - I'm a pretty stupid guy when it comes to finance and money.

The way I understand inflation is that the quantity of the monetary unit increases, decreasing the value of each individual piece.

Prices are raised to meet the increase in the quantity of the unit, meaning that a dollar can no longer afford you the same things as before.

>>1573061
It explains it pretty well imo