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I don't really see how this is true. inflation primarily hurts creditors (when it rises unexpectedly) and people who hold large amounts of cash. cash is a small
by leetcrew 6y ago
I don't really see how this is true. inflation primarily hurts creditors (when it rises unexpectedly) and people who hold large amounts of cash. cash is a small fraction of my net worth (compared to what I would expect for a poor person), but I also have way more cash in my checking account. if you only have <$1000 cash buffer that you routinely run down to pay for emergencies, it doesn't much matter whether inflation is 0% or 5%.
- johbjo 6y agoOne typical scenario; (rich people) take loans to buy assets. The loan itself causes inflation, and asset prices will rise. Then wages and cash savings have less relative value. Wages won't be affected until the firms can increase prices, which might happen much later.
- dnautics 6y agoThe wealthy have access to low interest credit, not the poor (both directly and indirectly via options, derivatives, forex, etc). When the poor have access to credit it's usually in very short term high interest vehicles (credit cards or loansharks), which are not as benefitted by inflation as you think.