“Inflation is taxation without legislation.”

Simplified Meaning:

When the prices of goods and services go up over time, it’s called inflation. Imagine you have $100 saved up. Today, you can buy a lot with that money, but a year from now, you might only be able to buy less with the same $100. It's like your money is quietly losing value. This feels like a tax because you end up paying more for the same things, even though no new official tax laws were passed. Consider the example of everyday groceries like bread and milk. If last year you could buy a loaf of bread for $2 and milk for $3, that was $5 total. This year, due to inflation, bread might cost $2.50 and milk $3.50, making it $6 for the same items. You still have to buy food, but now you need more money to get the same things, which feels like someone is taking money from you. In learning how to deal with this, people could invest their money in things that grow in value over time, like stocks or properties, to protect themselves against price increases. This way, their money can keep up with inflation, instead of losing its buying power.