$S&P 500 Index (.SPX.US)$ Inflation is as insidious as it is...

$S&P 500 Index (.SPX.US)$ Inflation is as insidious as it is destructive. People naively think the impact is merely that things cost more. Its far worse than that. Inflation distorts the marketplace and creates mal-investment and inefficiencies. Think of this way; if the purchasing power of the dollar was stable over time then marketplace decisions could be made with greater clarity and less risk because the value of money over time is constant. However inflation introduces higher levels of risk and margins of error into decisions because monetary value is uncertain. The further out, the greater the risk. The higher and more variable the rate of inflation is, the greater the risk. Capital Investments will be made that shouldn't, and some that should won't. Buying, selling, hiring and yes stock purchases too will be affected due to the future uncertainty caused by inflation. The net effect of all the distortions created by inflation is much less wealth is created in the marketplace.