Inflation is the biggest hidden tax. One of the things it does is save the government real wealth when it is paying off debt. Inflation also reduces accumulated savings. There is more to inflation than just consumer pricing. Not everything about inflation is bad either. Inflation actually benefits holders of real assets by depreciating their costs. Another effect of inflation is it tends to increase the rate at which an economy can grow. First it allows central banks to keep an interest rate that seems positive while it is actually negative. In terms of real investment this means a borrower actually profits by investing his cash in real businesses or commodities instead of financial instruments.
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