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by imtringued 1474 days ago
Inflation is actually inevitable not just because of limited production capacity but also because of limited storage capacity of the economy.

For some reason people got this weird idea that the economy will store an infinite quantity of capital. They probably got this mistaken impression from the fact that cash has a guaranteed zero percent interest rate. But since actual capital (food counts as capital for example) spoils in the real world the amount of capital that was produced starts diverging from the amount of financial capital that grants you the right to buy physical capital and this is how you end up with this eternally creeping inflation but that also explains why in a properly managed economy, the inflation rate is expected to be very low around 2%.