[ursuscamp]

Probably, but by far the most likely scenario is a decade or more of persistently high inflation as bondholders (i.e. your pensions and retirement accounts) and normal people are pick-pocketed to bring down the nominal debt load.

[bombcar]

Inflation just is another form of tax that’s almost uniformly flat.

(Actually it affects those who hold cash and cash-nominated things more than those who mainly hold debt)

[ursuscamp]

It definitely hurts those who hold debt. Maybe you're thinking of borrowers? Certainly debt holders are very damaged by inflation, too. Especially long term debt holders (such as the previously mentioned pensions/retirement accounts).

If you have a 30 year bond paying 2% and inflation goes up to 4%, you're making -2% on your bond. Sure, that's not as bad as -4% for cash holders. But it's not good at all if you're planning to retire someday as the compounding effects of inflation over the decades wipe out your retirement benefits.

[Ekaros]

Also the impact could be more immediate if you need the principal. As now your debt is worth lot less if you sell it. See the last years bank failures...

[bombcar]

I should have worded that better - by "hold debt" I mean people who are paying the debts, especially things like fixed rate mortgages.

If you borrowed $500k to buy your house at 3% and we hit 10% inflation, you look like a financial wizard pretty fast.

If you bought non-TIPS bonds during that time to finance your retirement, you may end up nearly destitute.