palmus said:
I'm having really fun though I've never understood the inflation.
actually, I don't know what it does. I know what inflation is IRL (im not stupid

) but how do I suffer from the inflation in the game?
From my guide:
5.9 Inflation, loans and bankruptcies
As everybody knows, inflation is what makes the same things more expensive with time. EU2 inflation has little to do with real life inflation, and is more like a penalty imposed on big expenders. Inflation will increase every cost in the game, from stability to research, armies, promotions, etc. Inflation is shown in your financial summary screen at the bottom, and if you hover the pointer over the treasury bar, it will tell you how much inflation you are getting and for what concept. You usually get inflation in two ways, by minting money from monthly income to your coffers (treasury) or by gold income. Raising war taxes, going bankrupt and some events will also jump your inflation. You will need to mint money from time to time, just don't make a habit of it. Every good player agrees that if you mint money and you spend that money in early investments that really pay off, you will end up with a stronger economy that if you never mint. As they say, "If you don't have some inflation, you are not minting enough". Rightful reasons to mint money are obviously desperate situations when you really need to buy peace or a few more armies to win the war, saving money for manufactories or promotions, and getting enough money to repay loans. Until you reach Infra 5, inflation will make everything, even research, more expensive, and that can seriously compromise your victory. In MP, if you let inflation get out of hand you are probably done. In SP things are more lenient. Try not to get over 25% inflation by 1550-1600. By then you should be about to discover Infra 5 if not done yet, and your problems with inflation are over. Some deflationary events can help you, and allow you to mint more and still keep within the limits. The way governors fight inflation has changed in different versions of the game. If every one of your provinces has a governor you get a 0.25% deflation every year, if you have less governors than provinces you get your percentage of provinces without governors deducted from that 0.25% total deflation (i.e. if half of provinces with governor, 0.125% yearly deflation).
Read the rest in the guide.