Re:The Fed has made a historic mistake on inflation
by toomuchtodo on Monday June 13, 2022 @04:22PM
(#31731274)
I think it’s crucial that this expectation should not be thought of as some sort of natural law. There is no requirement investment capital have value. On the contrary, one would expect the value of capital to continue to decline over time, especially due to structural demographic shifts.
It’s also the job of central banks to manipulate capital markets (“rows in a database”) to meet their mandates and desired outcomes.
https://www.visualcapitalist.com/700-year-decline-of-interes...
While true, I think it is fair that people broadly share an expectation that time value of money has a positive value and that central banks shouldn’t be subverting market forces to eliminate all opportunity costs of capital.