Inflation is a pretty cool financial tool that economic wizards employ to reduce the money supply.
Its all very complicated but what it comes down to is: burying wads of officially numbered
paper grimily rolled up in tin cans that should have been washed better had anyone
any real idea how long this stuff would be deep sixed is actually lunacy due
to these old bills now enjoying only a fraction of the buying power they
had when Bonnie and Clyde excitedly planted them. Yep, she don’t
take a rocket scientist to figure out that if the highest inflation
rate we are told we experienced was 3.85% in 2008, how
come the price of gasoline jumped from $1.59 a gallon
in 2000 to $3.20 a gallon (US) twelve years later?
Sure, the answer might be compound interest
but calculating $1.59 compounded by 3.85 % for 12 years
equals $2.50 – a wee bit less than today’s actual average price
but nevertheless, a good example why hoarding money
is silly as long as usury is acceptable. And it is.
Thank you, friend.
image courtesy: http://www.allmotivated.com/