One thing that inflation does that is rarely talked about is how it affects time preference (long-term orientation) of the population as a whole. As inflation rises, low time-preference folks are punished, and high time-preference are rewarded. high-debt w/ little savings is smart, YOLOs are natural.
A 22 years old now that saved 10% of his salary toward an index fund with 4-5% expected returns over a decade is disadvantaged versus someone who just spending his money for material rewards now (in 7%+ inflation long-term environment.)
It infects everything in society and absolutely not some benign monetary problem that the markets will adjust too.
"Low time preference generations produce prosperity, which produces high time preference generations, who bring ruin, which produces low time preference generations."
A 22 years old now that saved 10% of his salary toward an index fund with 4-5% expected returns over a decade is disadvantaged versus someone who just spending his money for material rewards now (in 7%+ inflation long-term environment.)
It infects everything in society and absolutely not some benign monetary problem that the markets will adjust too.
"Low time preference generations produce prosperity, which produces high time preference generations, who bring ruin, which produces low time preference generations."