Earning More Money But Feel Like There Still Isn’t Enough?

Nine out 0f 10 Americans do not understand inflation.

Inflation is a growth in the money supply. The Federal Reserve creates additional money, and it enters circulation. Since there is an increase in the number of dollars available, each dollar buys a little less.

Think of it this way: you have a used car. It is the only one. You can ask what you want since the buyer can’t go anywhere else and buy that car. If there are three identical cars for sale, you need to discount your car to sell it. Money is the same; more money in circulation means each dollar buys a little less. So it requires more dollars to buy the same item, not because the item is more expensive but because the dollars buys less and it requires more dollars to purchase it. Prices go up.

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