Because value itself is arbitrary. It's not like time or physics. Value is not an inherent property of the universe.
this post was submitted on 04 Oct 2025
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You're on to something: the 2% inflation target is just an arbitrary value.
It means your salary is constantly going down for doing the same work - you have to stay on the treadmill just to stay in place.
But if you're an asset holder then the prices of your holdings appreciate indefinitely, and governments get the power to levy this constant invisible tax on the workers.
Mark Blyth is an expert on the topic: https://youtu.be/GXBSNCysxiA
If money became worth more over time, there'd be an incentive to hoard it, which in turn would make it scarcer in circulation and worth more. Of course it's more complicated in real life, and the cycle would eventually break, but that's the gist of why deflation (what that is called) is seen as a bad thing.
Minor inflation is pretty harmless. Exactly 0 change in the value of money might be good too, but it's right next to deflation. So, the usual target amount is a percent or two of inflation per annum, to be safe. Central banks achieve this primarily by lending money out, at a higher or lower rate of interest as conditions demand.
Or does become worth more if you hoard it. They call that interest.
No, you have to lend it to someone else for that. And then can't use it for something else during that time, if a need suddenly arises. (Okay, so you can transfer ownership of debt sometimes. There's a whole math to this though, which is captured by the Black-Scholes model)
Collection of interest and profit from investments definitely are included in the reasoning of central banks.
Nothing has constant value
Because it's convenient to trade said object for that something instead of carrying around a scale and silver pieces.
Also I'm not sure how much the previous metal prices fluctuates but currency may just be more stable.
What if inflation isn't about the money losing value, but you having access to more money and thus spending it more frivolously?
Value is subjective. Everyone values different things, and to different degrees.
Objectively, I'd say its about Relativism.
banana for scale