How a watered-down pint of beer is like inflation in the economy.
A pint of beer đș starts out as 16 ounces of 100% beer, just like an economy starts out on a 100% gold standard.
Then your buddy, who only wants to help, gets the bright idea of helping you make your beer go further - by watering it down. So he adds 16 ounces of water to your existing 16 ounces of beer. And voilĂ !
You have 32 ounces of watered-down beer. But now it takes twice as much beer to get the same buzz of 16 ounces of 100% beer.
In an economy, your buddy just wants to be helpful and gets the bright idea to double the supply of money in the economy. And voilĂ !
You have twice as much money but watered-down purchasing power.
Yeah, thereâs twice as much of it (32 ounces of beer and twice as much money). But damn, dude, yuck!
Watered-down beer tastes like ass. And watered-down purchasing power takes $2.00 to buy what used to cost $1.00.