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> 2. It inflates away debts, which the poor definitionally have more of than the rich. No, they don't. Generally, the more wealthy you are, the more debt you h

> 2. It inflates away debts, which the poor definitionally have more of than the rich. No, they don't. Generally, the more wealthy you are, the more debt you have. The reason why this is should be easy to understand: Rich people have a lot of assets that can be used to secure loans, and are generally safer investements to the lenders, so they pay less interest, and can take on more debt to use as leverage for investment. Anything that reduces debt helps the wealthiest segments of population way more than they help the poorer ones, and monetary policy where rates are held below inflation is a wealth transfer from the poor to the rich.

the_gastropod 7y ago
Sorry, I should have clarified net debts. The size of your gross debt is irrelevant because the asset side is also being inflated away. Net is all that matters. (Yes, there are asset classes that're historically good at being protected against inflation. But they typically represent a small part of a portfolio) There is no conspiracy here. The implication that the Fed works to enrich the richest is a really dangerous and ignorant thing to perpetuate. The Fed is one of the very few things that offers some protection from unrelenting wealth inequality. It's hardly perfect, or immune from criticism. But attacking inflation itself as some conspiracy to enrich the already-wealthy is absolutely ludicrous.
- eru 7y ago
  > (Yes, there are asset classes that're historically good at being protected against inflation. But they typically represent a small part of a portfolio) Isn't it the other way round? If you invest in shares, real estate or even gold, you don't need to care about inflation? Only fixed income like bonds is bothered by inflation. (By moderate amounts of inflation. If the country you invest in descends into eg hyperinflation, the whole economy is going down, so shares won't hold up to well either.)
- dangerface 7y ago
  > asset side is also being inflated away The amount of money those assets are worth becomes inflated, and increased not lowered.

the_gastropod 7y ago

Sorry, I should have clarified net debts. The size of your gross debt is irrelevant because the asset side is also being inflated away. Net is all that matters. (Yes, there are asset classes that're historically good at being protected against inflation. But they typically represent a small part of a portfolio) There is no conspiracy here. The implication that the Fed works to enrich the richest is a really dangerous and ignorant thing to perpetuate. The Fed is one of the very few things that offers some protection from unrelenting wealth inequality. It's hardly perfect, or immune from criticism. But attacking inflation itself as some conspiracy to enrich the already-wealthy is absolutely ludicrous.

eru 7y ago
> (Yes, there are asset classes that're historically good at being protected against inflation. But they typically represent a small part of a portfolio) Isn't it the other way round? If you invest in shares, real estate or even gold, you don't need to care about inflation? Only fixed income like bonds is bothered by inflation. (By moderate amounts of inflation. If the country you invest in descends into eg hyperinflation, the whole economy is going down, so shares won't hold up to well either.)
dangerface 7y ago
> asset side is also being inflated away The amount of money those assets are worth becomes inflated, and increased not lowered.