I used to have a belief that inflation could reduce wealth inequality because I thought government would use the new supply of money to help the people in need (basically an indirect tax). But nowadays I am more inclined to believe it might be causing more harm than good. Here is my reasoning on why it could increase wealth inequality:
Rich people and also smart upper-middle class folks have realized that fiat is not a good store of value hence they keep most of their wealth in assets that actually grow like stocks, real estate, etc. This hoarding of real estate by them is what causes housing crisis.
But the people who are actually affected by inflation are the people who keep their wealth in fiat, whose wealth is slowly degrading. This is causes wealth inequality.
Bitcoin can solve them both as it gives a way for all of them to store their wealth. People might prefer bitcoin over real estate (as an investment) as its more liquid and easier to transport thus solving the housing crisis (at least partly).
What do you guys think about this?
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