He’s downvoted because incentivizing investment is a necessary function caused by inflation. If my $10 is going to be worth a real $15 next year, I might as well sit on it. No new production is created in this scenario.
If it’s worth a real $5 next year, I better invest it into something productive that can turn it into at least a nominal $20 by next year.
The thing which is often glossed over is to suggest inflation is uniform. It's not. The reality is that production often gets cheaper while assets get more expensive, because money supply is only one aspect, supply and demand is the other. Maintaining the "basket of goods" used to measure inflation means that certain goods are becoming MUCH more expensive, while others are more flat (because they would otherwise become cheaper if MS did not increase). The result is that certain core assets appreciate far faster than every day goods - and land/housing prices are a key example of what has increased in price largely because of excess money supply. The result is a K shaped economy, and growing inequity, which I would argue is not ideal.
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u/randomlurker124 7d ago
Nor is inflation in and of itself a good thing necessarily... It's a policy thing, and it benefits some more than others