I've thought *a ton* about the relationship between money, inflation, and inequality over the past few months. One of my key takeaways thus far, in a brief thread:

Technology is deflationary - it drives prices down. A central bank is inflationary - it drives prices up.

Put differently, central banks cause prices to go up, when prices would otherwise be coming down due to technological advances.

As the forces of technology get stronger and stronger over time, central banks have to take more and more action to hit their inflation target.

This tug-of-war between the natural forces of technology and the unnatural forces of central banks is the key culprit in the rise of wealth and income inequality over the decades. Technology tries to make prices go down while the central bank tries to make prices go up.

Normally, the gains from technology would be shared by *everyone* via lower prices. People would be able to afford things that they previously couldn't afford.

Instead, the would-be lower prices get inflated upwards by central banks.

This leads to some people *who otherwise could have afforded to purchase something* being priced out. The wealthier you are, the less likely you are to get priced out. The poorer you are, the more likely you are to get priced out.

The pivotal end result that drives inequality wider over time: some people cannot afford some things strictly because of inflationary monetary policies that rob them of lower prices.

End of thread.

Credit to @stephanlivera @JeffBooth @saifedean @PeterMcCormack @APompliano for assisting me down this rabbit hole of what money is and how it actually works. It's been (and continues to be) a fascinating learning experience. For anyone interested, go consume their content.