Friday, January 6, 2012

Inflation - how does it work?

think of a country having a set amount of buying power. lets just say for example 10 bars of gold. if the country printed 10 dollars then it would be 1 dollar per bar of gold. but if the country had printed 100 dollars then it would be 10 dollars per bar of gold. inflation is when the money you hold decreases in value and you need more to maintain buying power

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