Money creation

How to explain it to your child:

The pizza example:

"Imagine there are 10 children in your class and 10 slices of pizza. Each child gets one slice. Fair, right?

Now every child suddenly gets an extra €10. But there are still only 10 slices of pizza. What happens?

Everyone wants to buy pizza, but there isn't any more pizza. So the pizza baker says: 'If everyone has more money, I'll make the pizza more expensive.' Before, a slice cost €2, now it costs €5.

Result: everyone has more money – but everything costs more. Nobody has become richer. The money is worth less.

That's exactly what's called inflation."

What really happens when too much money is printed:

• Germany 1923: the government printed huge amounts of money. In the end a loaf of bread cost 105 BILLION marks. People needed wheelbarrows full of banknotes
• Venezuela 2018: inflation of over 1,000,000% (!). You needed a suitcase full of banknotes for a packet of rice
• Zimbabwe 2008: 100-trillion-dollar notes. An egg cost billions