In order to conduct our business affairs, it’s important for each side of a business transaction to feel that what they are supposed to get, they are getting. Yet, when we look at how persistent inflation has been, and in consideration that inflation has a way of getting away from whatever control we believe that we have over it, this thus signifies that a dollar today is not going to be the same as a dollar one year from now. So then, because there is inflation, which represents a debasement of the currency because it is no longer maintaining its value, there are not only going to be winners and losers when it comes to the effects of that inflation, but it also makes it more difficult to conduct our business as well as our personal affairs, because the value of the currency is in constant flux.
Quite obviously, whenever the coin of the realm is stable, and thus represents the same value as it did at the beginning of the year as it does at the end of the year, it makes our monetary transactions one to the other, to be straightforward, because there need not be taken into account inflation, because there is no inflation. So too, while in general those that are debtors prefer some degree of inflation because it means they are paying back their debts essentially at a discount, it needs to be recognized that those that are creditors, are typically the very same who represent the wealthiest and most successful people of society, and these people typically do not desire to see inflation, because it makes it more difficult to maintain or to enhance the true value of their assets, and thus they are going to be more inclined to take on more risk, so that they do not end up falling behind, which is something that they prefer not to do.
Look, it has to be said, that a prosperous society is the same in which the currency is stable. After all, in the absence of that stability, there is that constant risk that the whole currency edifice could collapse or be unexpectedly devalued, which not only brings troubles to one’s assets and status, but also to society, in whole, because those that have no or little assets are for a certainty going to be up in arms, which thus creates havoc, because a currency reset makes for a tremendous amount of tension upon the members of that society.
How stable a currency is could be said to be a fair reflection of how prudent and responsible those who are in charge of that currency are behaving in their duties. So then, those societies in which inflation is persistent and never goes away would seem to reflect a society that not only doesn’t have a stable currency but is clearly on the pathway to a debasement which will hurt not only the most vulnerable members of society but also businesses that have made either the wrong bets or simply not taken into full account that debasement has serious consequences.