"and inflation reduces the amounts of those debts." Only if inflation is at a higher rate than than the interest on the debt. Which is rarely the case. Bank lo

"and inflation reduces the amounts of those debts." Only if inflation is at a higher rate than than the interest on the debt. Which is rarely the case. Bank loans are constructed so that the bank makes money and that couldn't happen if they loaned money at a lower rate than inflation allowed. If you want to escape inflation, you put your money in a savings account and hope that the interest rate is properly matched to the inflation rate (they're commonly indexed to inflation.) This is less feasible for poorer people who don't have enough money to take out bank accounts and who necessarily have a higher percentage of their money in cash.