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The wealthy absolutely do not benefit from inflation, and lose the most money due to it in reality. Inflation depreciates the value of your liquidity, which is

The wealthy absolutely do not benefit from inflation, and lose the most money due to it in reality. Inflation depreciates the value of your liquidity, which is why every major company (except apple, it seems) dumps as much currency as possible into appreciable and tax deductible assets. However, that's more difficult for persons, and most of the super wealthy end up holding a plurality of their money on their person. Part of the reason for this is that they have enough money that they can't easily enter the market with a sizable amount of their total funds without moving the market against themselves.

jonknee 9y ago
> Inflation depreciates the value of your liquidity, which is why every major company (except apple, it seems) dumps as much currency as possible into appreciable and tax deductible assets. When you read stories that Apple (or whoever) has $X billion "in cash" it's not actual cash. They keep some around in money markets and the like for near term expenses, but the majority is in bonds that pay more than inflation. In fact, if Apple were classified as a bond fund they would be the largest in the world: https://www.bloomberg.com/news/articles/2017-05-04/apple-buys-more-company-debt-than-the-world-s-biggest-bond-funds https://www.bloomberg.com/news/articles/2017-05-04/apple-buy...
- viridian 9y ago
  That makes sense. Morningstar groups all near term liquidity together, and so I figured Apple had to be constantly expanding aggressively or something and needed a warchest 7x the size of microsoft's to do it. Sitting on bonds as amid-near term solution makes more sense.
MisterBastahrd 9y ago
Yes, they absolutely do. Without inflation, it would be almost impossible to borrow money from a bank. No borrowing = no new investment. Most super-wealthy people are constantly borrowing money because the rates they borrow at are lower than their return on investing that money.

jonknee 9y ago

> Inflation depreciates the value of your liquidity, which is why every major company (except apple, it seems) dumps as much currency as possible into appreciable and tax deductible assets. When you read stories that Apple (or whoever) has $X billion "in cash" it's not actual cash. They keep some around in money markets and the like for near term expenses, but the majority is in bonds that pay more than inflation. In fact, if Apple were classified as a bond fund they would be the largest in the world: https://www.bloomberg.com/news/articles/2017-05-04/apple-buys-more-company-debt-than-the-world-s-biggest-bond-funds https://www.bloomberg.com/news/articles/2017-05-04/apple-buy...

viridian 9y ago
That makes sense. Morningstar groups all near term liquidity together, and so I figured Apple had to be constantly expanding aggressively or something and needed a warchest 7x the size of microsoft's to do it. Sitting on bonds as amid-near term solution makes more sense.

MisterBastahrd 9y ago

Yes, they absolutely do. Without inflation, it would be almost impossible to borrow money from a bank. No borrowing = no new investment. Most super-wealthy people are constantly borrowing money because the rates they borrow at are lower than their return on investing that money.