>>10893763>Wouldn't the desire to earn more money induce people with capital to invest anyways?Sure, but not to the degree we do. As the OP said, money loses value at an exponential rate. That means you can’t be lazy. In a 0 inflation world, if I had 2 billion dollars I could be fine investing only 1 billion, and keep the other under my bed to not risk it. But if I do that in my world, every day I am losing a million dollars. So I have to invest it all. You should know not even billionaires like Bezos actually have 1 billion in cash. It is all in stocks and bonds. But you better believe that if there was no inflation, Jeff would keep like 10 billion in cash “just in case”.
>so won't the lower and middle classes be disproportionately affected by this due to a larger portion of their savings being cash, whether literal cash they have at home or money in the bank?This is a good point but in reality most of middle class people’s net worth is actually in real state, not cash. Poor people get affected but for them inflation means that they lose 1 cent per day. Hardly a tragedy.
>How much of it is just a closed loop of redundant financial maneuvers?I’d argue very little (but certainly nonzero) because you can’t grow your money in a loop. No one does this. Rich people usually hop from hedge fund to hedge fund, seeking the next big thing. And this is really meaningful because sometimes this means funding an entire new country. For example Puerto Rico was basically funded by a handful of hedge funds. Sure, that one went sour, but now the elite have a motivation to save Puerto Rico, so that eventually they’ll get their money back.
