Friday, April 13, 2012

How Inflation works?

Some people forecasted a Great Inflation is coming.
Inflation is a rise in the general price level of goods and services. In order to understand the Inflation's magnitude, I suggest to make a comparison between the price of the same apartment in the early 70's with today's. The property whose price twenty years ago was of 60 million Liras, today might have an appraisal of more than a million Euro.
Cash loses value if you don't invest it in something that yields rewards. 
This phenomenon goes faster as much as the inflation rises. 
The higher is the value the faster prices will rise.

Luigi Foscale

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