Do you understand money?

The essence of money is "merely a measure of valuation."

You may have more or less learned that initially, there was no concept of money; all transactions were conducted through barter.

For example, exchanging a sheep for a cow, or half a sheep for a bag of rice... But in such transactions, there would be a problem of value asymmetry. If I exchange a sheep for your cow, wouldn't you feel like you've suffered a great loss?

People began to think, and gradually there was a standardization of currency, solving the problem of unequal value and making the circulation of goods more efficient.The Evolution of Currency Standardization:

Commodity Money (Shells and Livestock)

Metallic Money (Gold and Silver Coins)

Credit Money (Bills of Exchange, Paper Money, Banknotes)

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Electronic Money (Credit Cards, Quick Payment)

From the earliest use of shells, to the measurement with copper coins/gold and silver, and now the use of credit money/electronic money. No matter how the form of currency changes, its essence remains the same, which is to serve as a standard to facilitate the circulation of goods.

Currency itself has no actual value; its value is determined by how much goods it can exchange for.

The money in your hand is nothing more than a piece of paper.The money in your hand is nothing more than a piece of paper; it does not have any real value. It does not possess the value of food to sustain life, nor does it have the value of clothing to keep you warm against the cold.

Since the advent of the industrial society, goods have become abundant, and social wealth has started to increase rapidly. Precious metals like gold and silver, which are scarce, can no longer meet the monetary needs of society, thus ushering in the era of paper money.

Because paper money is low in cost, it has solved a large amount of monetary demand. However, at the same time, because paper money can be printed in large quantities, it has also led to inflation.

Dilution has always been around us.

The principle of inflation is actually quite simple. It refers to the issuance of currency exceeding the actual amount of money needed for the circulation of goods, thereby causing currency devaluation. In layman's terms, it means that there is more money in society, and money is not worth as much.

For example:For example, in the market there are 2 cows and 2000 yuan, so:

1 cow = 1000 yuan

But now, if 2000 yuan is issued additionally, the money circulating in the market becomes 4000 yuan. However, at this time, the cows have not increased, and there are still only 2 cows available for trade, so at this time:

1 cow = 2000 yuan

So the money has devalued, and this is inflation.

Under normal circumstances, the quantity of goods and the circulation of money are in a relatively balanced state, and the price will remain relatively stable. However, if the central bank starts to print a large amount of money, the money circulating in the market will increase, and the balance will be broken, leading to the occurrence of inflation.

In fact, inflation has always been around us:

1. In 1990, the price of a jin (0.5 kg) of rice was only about 0.5 yuan, and now the price of a jin of rice is about 4 yuan.2. You may have also heard the older generation talk about their youth, when their monthly salary might have been just a few tens or even a few yuan, yet it was enough to support a family. Now, a few tens of yuan might only cover the cost of a meal.

Inflation has changed the measurement standards of money. The old standard was 0.5 yuan for a jin of rice, while the current standard is 4 yuan for a jin of rice.

Inflation has the greatest impact on us ordinary people by continuously diluting the money in our hands.

Inflation in our country is relatively mild, so this dilution process is stretched out over time, making it less sensitive.

As a result, a common phenomenon has emerged: a large number of people vaguely know about the existence of inflation and that it will dilute their money, but subconsciously they do not realize the seriousness of this issue for themselves.So, it's not taken very seriously, but rather becomes a "Buddhist" state, are you the same way?

If you currently have 100,000 yuan,

you want to know, what will it be worth in 10 years?

For this, let's consider a question: if you have 100,000 yuan now, do you want to know how much it will be worth in 10 years?

To find the answer, we need to know our country's inflation rate. Generally, people with some economic awareness usually look at the CPI (Consumer Price Index), which is an index that reflects the changes in the prices of goods and services in our lives.The general CPI is released on the 9th of each month and can be viewed on the official website of the National Bureau of Statistics:

By observing the increase in CPI, one can roughly reflect the inflation rate. Over the past decade or so, the average annual inflation rate in our country has been just over 3%, less than 4%. So, if we calculate the value of 100,000 yuan in 10 years, it would be roughly equivalent to about 69,000 yuan now.

At first glance, we have already obtained the answer. With an inflation rate of just over 3%, one can easily offset inflation by simply purchasing a bank fixed deposit financial product. So, inflation does not seem to be so terrifying.

But! Is it really the case?!To explore the truth, we need a more accurate way to calculate. If you want to know a country's real inflation rate, here is a formula for you:

Inflation Rate = M2 Growth Rate - GDP Growth Rate

M2 (Broad money) refers to the total supply of money in the market and in banks.

GDP (Gross Domestic Product) refers to the total amount of money consumed by the people of the country in a year.

Our total value of goods is constantly increasing, so the national currency needs to be issued more every year.

However, if the goods increase but the money does not increase, it will lead to deflation, which is also harmful to the economy. Similarly, if the amount of money printed far exceeds the number of goods increased, it will lead to inflation.

So, as long as the annual increase in the amount of money issued is roughly consistent with the annual increase in the number of goods, the price will be relatively stable.

Then, by subtracting the increase in the total consumption value from the increase in M2, you can get the inflation rate for this year.The average annual inflation rate over the past decade or so has actually been around 7%.

If we calculate based on this data, how much will your 100,000 yuan be worth in 10 years? That's right, only a little over 48,000 yuan.

Are you shocked! This is the rate at which your and my savings are depreciating.

To be even more stimulating, let's make another assumption:

If you have 1 million yuan, it will only be worth over 400,000 yuan in 10 years, and only over 200,000 yuan in another 10 years.

This is actually a very terrifying rate of depreciation!

I hope that from now on, you can all realize this, and be aware of how your wealth is being diluted.It seems like the text you provided for translation is incomplete or missing. Please provide the full text you would like to have translated into English, and I will be happy to assist you.