Do you understand what INFLATION is?

It is also important to note that inflation is related to the value of money. The classic example is the "Gallon of Milk" example if you compare what a gallon of milk cost today versus in 1950 you will most likely find that it costs more now. Not because milk is any more rare or in demand as a comodity, but that the value of the currency in relation to the product you are looking at is decreased. So lets say that the US government decided to print out a few billion extra dollar bills and put them into circulation. This increase in cash volume would decrease the value of the dollar and make the price of everything go up. This is inflation. On the other hand if timese are tight and nobody wants to spend their money, the market will react by decreasing the price of products which means that you will get more for your dollar and the dollar will be, relativly speaking, worth more. Simply put inflation is what causes it to take more currency to purchase the same product. Typically the value of money decreases and we see controlled inflation, so when you invest your money you should take this into account. If you invest your money at 3% gain, but inflation is 5%, you may have more dollars at the end of the day, but it is worth less than what you started with.

hello, Arkie69.. the way i understand it, inflation refers to the increase in prices of basic commodities, hinged on the price of oil in the world market. we create inflation "subconsciously" through the law of supply and demand, ie, "if the supply is high and the demand is low, the price is low; if the supply is low and the demand is high, the price is high." as consumers, we actually 'dictate' the prices of certain commodities in the market, depending on how many or how much we 'demand' for them. happy myLotting!