The brain stores memories in 2 ways. Short term memories, like a possible chess move, or a hotel room number, are processed in the front of the brain in a highly developed area called the pre-frontal lobe, according to McGill University and the Canadian Institute of Neurosciences, Mental Health, & Addiction.
Short term recollection is translated into long term memory in the hippocampus, an area in the deeper brain. According to McGills, the hippocampus takes simultaneous memories from different sensory regions of the brain and connects them into a single 'episode' of memory, for example, you may have one memory of a dinner party rather than multiple separate memories of how the party looked, sounded, and smelled.
According to McGill, as memories are played through the hippocampus, the connections between neurons associated with a memory eventually become a fixed combination, so that if you hear a piece of music for example, you are likely to be flooded with other memories you associate with a certain episode where you heard that same music.
Source: {http://www.livescience.com/32798-how-are-memories-stored-in-the-brain.html}
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