Inflation
When George Harrison wrote “Here Comes the Sun” it was 1969. Inflation was being monitored on a long term index which had commenced in 1947, shortly after WWII had ended. Commencing at 30 points, 18 years later in 1969, the index had risen to (coincidently) 69 points. 30 is an odd level to start an index you would think, but the data had been re-assembled in 1974, with a base level of 100 points, so of course the starting point had to be lower than 100. Neither could the index start at zero, because anything times a zero is zero. That index would just flatline.
“Here Comes The Sun” is a song of such optimism, “We have been waiting such a long time” for better times to come, but the melody does become a touch repetitive after a while. Start to finish for a pop song in its era, took just over 3 minutes. If the song had grown by inflation since, it would now last for 1 hour and 3 minutes! That sort of repetition could cause madness, but the example does explain a little about the pernicious rate of long term rising inflation.
How did WWII get paid for? The short answer is it never did, but that enormous post war debt which seemed impossible to fathom at the time, now stands at just 2% of its former self in relative money terms. You see, as long as the interest is covered on the debt, the initial debt will eventually just take care of itself over long periods of time.
A healthy level of inflation is a requirement of any debt-laden country, to slowly erode the balance of the debt over the years. Obviously too much inflation and your currency becomes toast. Too little or even zero inflation is also bad for economies as there is no urgency to buy anything today when you know the cost will be the same for a few years. Inflation is like Goldilocks.
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