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Inflation doesn’t really punish all “wealth holders” just those that hold cash and cash equivalents. Real estate and the stock market should benefit from inflat
by bequanna 7y ago
Inflation doesn’t really punish all “wealth holders” just those that hold cash and cash equivalents. Real estate and the stock market should benefit from inflation when it is paired with some growth. Stagflation, however, is just bad for everyone.
- ericd 7y agoThis isn’t quite true, because you’re taxed on nominal, not real gains. If I own a share of a company worth $100, and the USD drops in value by 50%, but my perfect inflation hedge of a stock (which they’re generally not) shoots up to $200. I’m not richer in any real sense, and the I still have to pay ~30% tax on the increase in value in CA when I sell it. Better than holding dollars in that scenario, though.
- greysphere 7y agoAbsolutely, the theory being the other assets will adjust to their correct value on their own (see: stock market plunge), unless they are propped up by bailouts or whatnot.