Benefits of Inflation
We may be facing difficult times. Corona, the Ukraine war, the sharp increase in money supply and some wrong political decisions have meant that our money is becoming less and less valuable. Maybe that has a few good sides too.
I'm no economist, so I'm probably missing some obvious points.
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1. It gives us an incentive to focus on our earnings
We are compelled to look more to future earnings than to present possessions.
We can no longer rest on our laurels.
2. It reduces the value of liabilities
States, indebted companies and private individuals have more scope for reform. This is at the expense of those who live on their past earnings.
3. It shows the abstract nature of money
This creates openness to new currencies such as Bitcoin and Ethereum.
4. Inflation reduces obedience to authority
Questionable decisions by politicians and central banks make people stop trusting them blindly.
5. Inflation forces us to think seriously about investing
A basic bank account and government bonds are no attractive options
6. Inflation drives some people to treat themselves instead of putting off all rewards.
Carpe diem!
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