Nominal Wealth: The Psychological Blindness to Purchasing Power

If your boss gives you a 2% raise, but inflation is running at 4%, you are mathematically poorer than you were last year. Yet, your brain feels a surge of satisfaction because your paycheck is physically larger. You are suffering from the Money Illusion. This cognitive bias proves that the human brain is fundamentally incapable of intuitively grasping "e;real"e; value. We fixate obsessively on t...