Investors look for a return after accounting for inflation. If inflation is 5% and interest rates are 10%, the return is the same as if inflation were 0% and i

Investors look for a return after accounting for inflation. If inflation is 5% and interest rates are 10%, the return is the same as if inflation were 0% and interest rates were 5%. Although recent years have been a puzzling exception, it is typical for real interest rates (nominal rate minus inflation rate) to be positive. If someone is inclined to just live off their accumulated savings, this is just as possible with inflation as without, as long as the real interest rate is the same. It is true that the value of savings tend to be destroyed in episodes of hyperinflation, when real rates don't keep up, but hyperinflation is certainly not a road to a well functioning economy.