Let's assume you're a restaurant owner with one gallon of milk, with 16 servings of 8 ounces per serving, but you have 17 customers that want a serving of milk. What do you do? It's easy, you just add 8 ounces of water to the gallon, mix it all up and now you have enough for 17 servings, although the milk is a little diluted. Probably, nobody will notice and your make an extra profit.
So, what if you have 20 customers that want a serving?
That's where it can become a problem. If you add too much water, some people might be a little suspicious after they taste their "milk" and demand what they bought, which, since you don't have any more milk, you give them a free piece of pie.
Others might demand a reduction in the price for their serving of milk, which means the value of your serving of milk has dropped; especially when others see what they were served instead of milk. Now, you not only have dissatisfied customers, your reputation is tarnished. Future customers will be hesitant to buy your milk and the lack of customers can lead to financial hardship. Your milk has no value and you can't give it away.
There you go; that's inflation. All you have to do is substitute the government as the restaurant owner, money for the milk and investors for the customers.
You're asking: "But what about the customers that kept accepting the diluted product?"
The answer? They got screwed. How does it feel?
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