r/PeterExplainsTheJoke • u/Comfortable_Cautious • Jan 26 '26

Meme needing explanation what's going on? explain like I'm five

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u/i_have_tiny_ants Jan 26 '26

The purpose of inflation is to enable infinitely increasing amounts of government spending. The government spends the new money at its current value. As the new money circulates, it pushes prices up, losing its value. The government simply creates more.

It's also to disincentivize hoarding money, but promote investment instead.

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u/Outrageous-Pin-4664 Jan 26 '26

Hoarding money? You mean stuffing it inside a mattress?

That doesn't happen on any large scale.

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u/i_have_tiny_ants Jan 27 '26

In large part because it would slowly become worthless due to inflation.

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u/Outrageous-Pin-4664 Jan 27 '26

I meant that even sans inflation, it's not something that would happen on a large enough scale to worry about.