Understanding Inflation & Deflation, Building Wealth, Investing, Retirement, Stock Trading, Freedom, Liberty, Applying History

Episode 82:  Don’t be fooled by political & financial double-speak.  Prices rise & fall because of two independent factors- Supply/Demand and Inflation/Deflation.

Supply > Demand:  prices fall  [this can be caused by a number of factors: consumer apathy, over capacity of production, technological advances, etc]

Demand > Supply:  prices increase [consumers are willing to pay more to get something that is scarce]

Increased Money Supply:  prices increase because more money is available, this is INFLATION [money supply can be increased by Central Banks manipulating interest rates or “printing money”, easy mortgages loans, or loose credit cards]

Decreased Money Supply: prices decrease, this is DEFLATION [money supply is restricted, for example because of stricter lending policies or higher interest rates]

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