WEBVTT

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let's assume your monthly income were to

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somehow double congratulations you can

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now for the most part afford to buy two

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times more stuff but what if the monthly

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income of everyone else were to also

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double well in that case you'd no longer

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be able to buy two times more stuff

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because since everyone else also earns

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two times more there would be two times

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more money chasing roughly the same

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number of goods let's take things one

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step further what if your income doubles

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but the income of everyone else triples

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in that case you'd actually become

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poorer why because making two times more

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money is not enough to keep up with

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everyone else who now makes three times

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more if there's an overall increase in

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the price of goods and services of X

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percent this year

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you have to earn at least X percent more

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than last year

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to avoid becoming poorer in real terms

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history makes the effects of inflation

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crystal clear today each dollar buys you

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approximately 39 times less potatoes

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than a hundred years ago or 20 times

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less coffee 24 times less bread and so

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on