Inflation tends to benefit debtors at the expense of creditors, and if the government happens to be one of the biggest debtors—and it’s normally the case that they are—then inflation is a very useful hidden tax. Because effectively it’s a tax on people’s cash wealth. If you’re not anticipating the inflation, it wipes out your cash savings. Then the government is effectively a winner. And you, the cash saver, are a loser.
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