A very short explainer on why inflation is bad.

 HERE is an article outlining 10 reasons why but it misses the main point!

The main reason why inflation is bad is because it confuses consumers.

The capitalist system is based on relative prices. If the  price of Lindemans wines go up then I buy Henscke for example.

If inflation rises substantially then absolute prices will confuse consumers and suddenly relative prices are hard to detect. Yeah I know it is a simplified example but that's economics.

In the end the RBA wants the capitalist system to work effectively and it can't if inflation rises to high levels.