Meditations and Learnings

Meditations and Learnings

Increases in Money Supply Cause Inflation

Inflation makes people feel poorer and shakes their confidence in the economy because they don’t know the real values of goods. When people have more money, they spend it. If supply can’t meet demand, the prices go up. Central banks can moderate the money flow, but sometimes they make things worse because the temptation to print more money is strong.