Friday 15 January 2010

What is "inflation"?

People generally misunderstand what "inflation" is, or how their experience of "inflation" comes about. The summary is "it's not what you have been taught to think it is, that is price inflation, which is a result of monetary inflation".

However, Peru Saxena has a nice "Inflation 101" article for you, which lays it out much more clearly than the above and without getting into too much detail or going far off-topic. You can read it here, and I recommend you do because understanding this concept of inflation is fundamental to your future financial wellbeing.

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