Whenever currency is printed, there is a larger pool of avaliable currency. However, the goods and services within the country stay the same. Thus, naturally, goods and services will cost a higher price in order to have the same purchasing power (relative cost) as they did before the increase in currency supply.
that's why holding paper money is dangerous. If i talk about indian currency, 10 rupees had a very good value in past but now 10 rupees is like 1 rupee. So after doing FD in your bank you thinking that you are the smart person then you are wrong here because instead of profit, you will loss your money and bank will take the benefit from your fund.
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It's true! You need to know the risks associated with storing your wealth in your native fiat currency. Let's take India, great example! The Indian Rupee has been inflated 195% since 2010. (https://www.inflationtool.com/indian-rupee/2010-to-present-value)
That equates to the same as 'Half of your Indian Rupees in the bank have been stolen over the last 10 years'. It is literally the same thing! Think of all of those hours your parents and yourself may have worked for half of their savings to have been stolen, through inflation, over the past 10 years! Not to mention more!
Let's take this further! Say your grandparents have been saving for their retirement since 1990 and storing Rupees away. They have been inflated 875%. That equates to, 'You have had 90% of your savings for retirement stolen'. (https://www.inflationtool.com/indian-rupee/1990-to-present-value)
Mind blowing.
Thank you so much for the comment!
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