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The Wise Investor

to the valley and see how things have developed.
The valley people had established a thriving
community. Their economic system had all the
elements of your modern system, and sport and art
were also developing within the valley.
The economic exploits of the people were so
successful that they easily produced the things they
needed, and they did not need to toil in the fields all
day long.
They had time to develop the finer things in life.
Currency notes were used for all buying and
selling, and the whole system worked extremely
well. Over time, however, the people noticed that a
strange thing was happening. Gold was still gold,
and property still property, but the value of currency
notes seemed to be declining. Things that once cost
a certain number of dollars, now seemed to cost a
little more.
Each year, the value of a single dollar became a
little less than the previous year. It was a slow
change, however, and the valley people were not
unduly concerned. Still, they did not understand why
this occurred.
Perhaps, they thought, it was due to the growth
in population. Perhaps there were more dollars in
circulation, so each one would be worth a little less.
Whatever the reason, people with their wealth in
the form of property, gold, or shares of companies
seemed to keep it, while the people who had dollars
in the bank seemed to loose their wealth.
Of course, many of these people earned interest
on their dollars, and this often compensated for the
reduction in the dollar's value. Depending on their
interest rate, some people had a greater wealth at
the end of the year, but others had less wealth, even
though they had earned extra dollars in interest.
This was because the value of a dollar was