Have you ever wondered why your grandparents say a movie ticket used to cost a nickel? That is the result of what is inflation.
Imagine you have a rare baseball card. There is only one in the whole world, so it’s very valuable. Now, imagine someone turns on a magical copy machine and prints a million copies of that card.
Suddenly, your card isn’t rare anymore. It’s common. It’s not worth as much.
Money works the same way. When the government prints too much money, every dollar bill becomes less special.
It’s like watering down lemonade. If you add too much water to the pitcher, it doesn’t taste sweet anymore. You have “more” liquid, but it’s weak.
Inflation is just weak money.
That is why things cost more. The price of the movie ticket didn’t really change; the money you used to buy it just got weaker.
So what is inflation? It’s the invisible tax that steals the sweetness from your money.