In finance and economics, it is tacitly assumed that inflation will continue, and will most probably continue indefinitely, with the following concomitant result: The price of good and services such as food items, cars, services, and so on will increase indefinitely,
the purchasing power of money, namely, the value of the $ will decrease indefinitely, and
working wages and salaries will increase indefinitely.
a. Discuss the rationale behind each of these phenomena.
b. If these phenomena hold true indefinitely, show how one may, and should, allocate one’s assets, and manage one’s investment portfolios, so that one has a maximum opportunity to accumulate wealth.