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Replying to Avatar Jac

So I’ve been reading about inflation. While I know that printing new fiat currency fuels inflation, I’m not sure exactly why. Let’s say I have ten people and ten thousand distributed entirely between them, but not equally because that isn’t the way the world works. They participate in an economy self contained amongst them, and I show up with an extra 10% of the total economy and start to participate by lending this money to the ten people in a discriminating way. What happens to their purchasing power and why?

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BTC_P2P 2y ago

There is 10% more dollars chasing the amount of goods / services. Economic competition for finite goods / services ensues and prices are bid up in the market as participants use their additional currency units to seek the things they want.

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