You are probably not among those who “love” inflation or think that it is “good” as shown by a peak in the stock market.
The graph shows how the prices of necessities have increased over the past five years.
It is possible that the price of gasoline will rebound like a “stretched rubber band” if the Iran war is over and tankers are safely passing through the Strait of Hormuz. The price is an issue of supply and demand, and it will come down if abundant supply is assured. But even if oil prices “drop like a stone,” David Stockman points out that during May the producer price index rose at an incredible 41% annualized rate. The consumer price index is just beginning to catch up.
Inflation is not just a price increase. It is a decrease in the value of money.
Since 1987, the dollar has lost 66% of its value.
I recall from grade school in the 1950s arithmetic problems that priced a loaf of bread at about $0.03.
The reason we have about $40 trillion in (acknowledged) public debt is that when government spends more than it collects in taxes, it “borrows” the money—which is simply created (“printed”) out of nothing. It must be paid back—or “serviced” since it is currently not being paid back—with the proceeds of goods and services extracted from the real economy to pay interest. This constitutes a hidden, unlegislated tax. Honestly enacting such a high, regressive tax would not be politically feasible.
The first recipients of this largesse can use it to buy up assets such as stocks and real estate, greatly increasing their price. This dilutes the money supply, so the additional dollars are worth less. Wages do not keep up. Those dependent on wages or fixed income see their standard of living fall, and they may be buying necessities on credit. And the distribution of the fiat dollars, first to the moneyed classes, is largely responsible for growing wealth disparities.
The high price of financialized assets does not reflect the real wealth of a nation, and imaginary wealth can vanish overnight. Current stock values, according to Stockman, are at the 100th percentile of historic performance—going back to the 1890s. Every time the stock market has worked itself into a speculative bubble even approaching this absurd magnitude, it has crashed and crashed hard.
No, destroying the value of the currency is not good.
Additional information:
