Eli5 what causes a currency to lose value?
In: 1
Say there are 100 seashells in the world. You have 10 of them. You own 10% of the seashell supply
Then 900 more seashells wash up on shore. Your seashell collection did not change, but now you only have 1% of the seashell supply. You have the exact same amount of seashells but they are now worth 1/10th of what they were
That’s inflation, which is how currency loses value. When you put more dollars into the system, it makes every other dollar worth less. The inflation we are seeing now is due to politicians dumping literally trillions of dollars into the US economy.
Latest Answers