One minute economics--inflation

let's assume your monthly income were to
00:02
somehow double congratulations you can
00:06
now for the most part afford to buy two
00:07
times more stuff but what if the monthly
00:10
income of everyone else were to also
00:12
double well in that case you'd no longer
00:16
be able to buy two times more stuff
00:17
because since everyone else also earns
00:19
two times more there would be two times
00:22
more money chasing roughly the same
00:24
number of goods let's take things one
00:26
step further what if your income doubles
00:29
but the income of everyone else triples
00:31
in that case you'd actually become
00:33
poorer why because making two times more
00:37
money is not enough to keep up with
00:39
everyone else who now makes three times
00:41
more if there's an overall increase in
00:44
the price of goods and services of X
00:46
percent this year
00:47
you have to earn at least X percent more
00:49
than last year to avoid becoming poorer
00:52
in real terms history makes the effects
00:55
of inflation crystal clear today each
00:59
dollar buys you approximately 39 times
01:01
less potatoes than a hundred years ago
01:04
or 20 times less coffee 24 times less
01:07
bread and so on