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Higgins Capital Management, Inc.

What Is Inflation and Why Should You Care About It?

Prices: Up, up and away

Inflation occurs when there is more money circulating than there are goods and services to buy. The process is like trying to attend a Sold-out concert at the last minute; there is more demand for tickets than there are tickets to go around.

As a result, tickets may trade  hands for far more than their stated prices. When there's a lot of demand for goods and services, their prices usually go up. The law of supply and demand produces price inflation.

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