[caption id="attachment_2773" align="alignright" width="150" caption="Photo by Clearly Ambiguous"][/caption] This post serves as clarifying some economics concepts for myself also. It has to do with wealth and how it links to being rich and famous and getting adored by the masses. Imagine that the world has only 2 pple: 1 farmer and 1 fisherman. The farmer harvests some rice every day and the fisherman catches some fishes. The farmer will sell some rice to the fisherman and vice versa. So the money supply in this world has maybe like $4, $2 with the farmer which he gets from selling 2 kg of rice and $2 for the fisherman who sells 2 kg of fish. So the question is how can either of them get richer? This is quite easy to answer, say the farmer is the aspire-to-be-rich kind, so he contemplates to be richer than his other companion on this lonely Earth. Well, what can he do? He can raise prices. Say previously he sold 1kg of his rice for $1 to the fisherman. Now he can sell $2 for 1kg. Then he will be earning twice as much! How wonderful. But then since there is only one other person on this lonely planet, i.e. the fisherman, he will raise prices too unless he is stupid or something. Then we get into a situation called inflation. Nothing really changed just that things got more expensive. It doesn't mean that if you have more dollar notes, you are richer. So how does the farmer REALLY gets richer than his companion? The farmer's wealth in this world is restricted by the total money supply of $4 so the farmer get "richer" by way of having more free time since he can store up his harvest and wait for the fisherman to have more money to buy from him. Read more...