Inflation will create poverty… and disruptive innovations
Many of the world’s largest economies are currently experiencing substantial spikes in inflation.
In basic terms, the prices of the goods and services that people, businesses and governments buy are mostly going up in most major economies right now.
Prices going up is not necessarily a bad thing and there are certainly negative impacts that result from prices failing to grow and even falling.
What makes this inflation a major concern for people, businesses and governments is that it is:
- Powerful — Inflation has shot up from near 0% to >6% in many regions.
- Sustained — Inflation has persisted at high and growing levels for at least two quarters.
- Unstable — Inflation has not reached an equilibrium, so there is uncertainty about future prices and affordability.
Because of these characteristics, a dollar saved today can be expected to buy less tomorrow.
In stable environments this is true as well, however it is generally a known, small amount (often around 2–3% less per year)
In the current environment, it is a relatively large and unknown amount (some number >6% per year).
