Is inflation benefical to some institutions? banks for example or the real estate market?

Question

Is there any reason why inflation would be a good thing?

Answer 1

Inflation is good for borrowers, bad for lenders. If you have a fixed rate mortgage, for example, your payments keep getting cheaper as a result of inflation. If you have a big debt to pay off, that debt gets easier to pay as money gets cheaper, as long as your income is rising with inflation. Inflation does not really hurt people who are living off their incomes and whose incomes rise to keep up with inflation, but inflation does hurt those who are living off their savings.

Answer 2

No never is a good thin imagine you own a real estate. Ok with inflation your real estate will be worth more than before but also all the goods will be more expensive so youll have more money but you wont have more purchase power, you wouldnt be able to purchase more stuff. In a bank the same thing because with inflation there are greater interest rates and people will loose their purchase power so they are not going to be able to pay the banks for the loans they already have plus high interest rates makes that no one wants a new credit so i think inflation is worse for banks than for other business. That was what happened in Mexico in 94 because of the inflation the banks went to bankruptcy and the government had to put money to save the financial system so that led to a crisis, so inflation is always bad.