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He's saying that inflation hurts those who are owed money, and helps those who owe money. The people who are owed money are more likely to be rich. The peopl
by nkurz 11y ago
He's saying that inflation hurts those who are owed money, and helps those who owe money. The people who are owed money are more likely to be rich. The people who owe money tend to be poor. Thus the immediate effect of inflation is to redistribute wealth from the rich to the poor.
The open question is what the longer term effects of inflation will be: who benefits, and who loses, once the system again reaches equilibrium. But based on history, I think we can assume that low inflation works out well for those who already hold lots of capital.
- AnthonyMouse 11y ago> But based on history, I think we can assume that low inflation works out well for those who already hold lots of capital. Based on history, everything works out well for those who already hold lots of capital. About the only exceptions are widespread economic destruction, violent revolutions, and that thing the transistor did to "those who already hold lots of capital" but invested it in the manufacture of typewriters and carbon paper. And only the last one really helps the common people.