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This is complicated. Debt/bonds do lose value with inflation, but things like commodities/real estate/most stock securities do not (except for via co-occuring r
by ivalm 8y ago
This is complicated. Debt/bonds do lose value with inflation, but things like commodities/real estate/most stock securities do not (except for via co-occuring recession, which also hits workers through layoffs).
- AnthonyMouse 8y agoOn the other hand, the prices of those things are quite inflated already and it's quite a painful adjustment for their nominal values to decline. If nominal housing costs go down then people end up with underwater mortgages, there is a cascade of defaults, etc. But combine e.g. relaxing zoning rules with a reasonable level of inflation and then nominal housing prices don't have to decline to adjust, they can just stay where they are as nominal wages and other prices catch up to them.