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> Inflation only matters from the time you receive your paycheck to the time you invest it in productive assets or buy the necessities of life. It means the pe

> Inflation only matters from the time you receive your paycheck to the time you invest it in productive assets or buy the necessities of life. It means the people who save by depositing cash in the bank lose value over time, causing them to purchase investments out of necessity (rather than purchasing them because they believe its a good investment). This bids up the price of investments relative to their return, which effectively reduces returns to a level commensurate with the artificially low interest rates. It also negatively impacts anyone who is long cash for any reason (perhaps their business requires them to retain a certain amount) and anyone who relies on fixed payments denominated in dollars (retirees, pensioners, disabled persons, those on public assistance, etc.). > After that it sets the benchmark rate of return for your investments. Those are nominal returns, not real returns. Inflation generates no real returns. > If your salary fails to track inflation that's between you and your boss who's giving you a pay cut year over year Nice rhetorical judo, to frame the central bank’s actions as normal and the lack of an increase as a decrease. > or between you and congress if you're under the minimum wage umbrella. Alas, if congress could lower the minimum wage without political fallout, economists might suggest they do that instead of inflating the money supply. > Currency only has value while its changing hands and inflation is an incentive to change hands. If you'd invested in anything at all 100 years ago you'd have just as much value as you do today. If you insisted in sticking a square peg in a round hole and hid your cash in your mattress the whole time, inflation did its job and took that value from you. This is why time preference should be taught in school.

arcticbull 6y ago
> It means the people who save by depositing cash in the bank lose value over time, causing them to purchase investments out of necessity. Ah you get it. That's the idea. Buy gold if you want, buy real estate, buy annuities, buy fixed incomes, I don't care, but money is an intermediary - not a long-term store of value. If you treat it as one you'll have a bad time. Just like if you treated your car as a boat. It'll work for a bit, then it'll sink. Because it's the wrong tool for the job. > Those are nominal returns, not real returns. Inflation generates no real returns. Did I say inflation generated returns? No, I said it sets the benchmark rate of return for your investments. If your investments fail to exceed inflation they're not the right choice. That's your duty in a capitalist society - to pick winners by investment. > Nice rhetorical judo, to frame the central bank’s actions as normal and the lack of an increase as a decrease. They're paying you less value so it's a decrease. You're tripping yourself up focusing on units instead of what they represent. After all, inflation has many positives, too. > Alas, if congress could lower the minimum wage without political fallout, economists might suggest they do that instead of inflating the money supply. That's between you and congress, not between you and Janet Yellen. > This is why time preference should be taught in school. I'd argue this conversation is why ECON 101 should be mandatory, so folks have the tools they need to thrive in modern society instead of, well, tilting at windmills.
- chordalkeyboard 6y ago
  > Ah you get it. That's the idea. Buy gold if you want, I don't care, but money is an intermediary, not a long-term store of value. Only because the wealthy benefit from depreciating currency. It doesn’t have to be this way, and it is this way because of policy that is designed to benefit the ultra-wealthy. > They're paying you less value so it's a decrease. You're tripping yourself up focusing on units. They’re paying the same, but the units depreciated because the oligarchs want workers’ wages to go down. > If you treat it as one you'll have a bad time. Just like if you treated your horse as a boat. Or treat a savings account as a savings account.
  - AngrySkillzz 6y ago
    > Only because the wealthy benefit from depreciating currency Source this claim. Everyone benefits from a depreciating currency because inflation provides a buffer against deflationary spirals that lead to large recessions and job losses for people of all classes. Tell me exactly how inflation benefits only the ultra-wealthy and not anyone else. > because the oligarchs want workers’ wages to go down. I would suggest that you clarify this claim so it does not sound so much like a conspiracy theory.
    - chordalkeyboard 6y ago
      > Source this claim. Asset price inflation vs depreciation of debt in real terms. Wealthy people hold assets that are valued in currency. Depreciating currency causes those assets to go up in nominal terms, and additionally depreciating currency causes a flight to assets. Wealthy people (by definition) have more assets than non-wealthy people, hence this flight from currency to assets bids up the prices of assets. > Everyone benefits from a depreciating currency, because inflation provides a buffer against deflationary spirals that lead to large recessions. Thats a theory-laden and motivated explanation. Surely you can do better than just argument by assertion? > Tell me exactly how inflation benefits only the ultra-wealthy and not anyone else. Thats not my claim. > I would suggest that you clarify this claim so it does not sound so much like a conspiracy theory. I suggest you do your own research and discover that the central bank is very much fact and not at all theory.
deleted 6y ago
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neilwilson 6y ago
"anyone who relies on fixed payments denominated in dollars (retirees, pensioners, disabled persons, those on public assistance, etc.). All those people are, or should be, index-linked. But they are a convenient human shield for the real culprits. The people who actually rely on fixed incomes are those holding the debt assets that rot by inflation - ie bankers and rich people. Inflation helps debt payers by transfers from debt holders. However it is the latter that have the political power. Nobody else is affected by inflation. They are affected by the systemic lack of jobs induced by a central bank system that is overly tight to avoid inflation that never happens.

arcticbull 6y ago

> It means the people who save by depositing cash in the bank lose value over time, causing them to purchase investments out of necessity. Ah you get it. That's the idea. Buy gold if you want, buy real estate, buy annuities, buy fixed incomes, I don't care, but money is an intermediary - not a long-term store of value. If you treat it as one you'll have a bad time. Just like if you treated your car as a boat. It'll work for a bit, then it'll sink. Because it's the wrong tool for the job. > Those are nominal returns, not real returns. Inflation generates no real returns. Did I say inflation generated returns? No, I said it sets the benchmark rate of return for your investments. If your investments fail to exceed inflation they're not the right choice. That's your duty in a capitalist society - to pick winners by investment. > Nice rhetorical judo, to frame the central bank’s actions as normal and the lack of an increase as a decrease. They're paying you less value so it's a decrease. You're tripping yourself up focusing on units instead of what they represent. After all, inflation has many positives, too. > Alas, if congress could lower the minimum wage without political fallout, economists might suggest they do that instead of inflating the money supply. That's between you and congress, not between you and Janet Yellen. > This is why time preference should be taught in school. I'd argue this conversation is why ECON 101 should be mandatory, so folks have the tools they need to thrive in modern society instead of, well, tilting at windmills.

chordalkeyboard 6y ago
> Ah you get it. That's the idea. Buy gold if you want, I don't care, but money is an intermediary, not a long-term store of value. Only because the wealthy benefit from depreciating currency. It doesn’t have to be this way, and it is this way because of policy that is designed to benefit the ultra-wealthy. > They're paying you less value so it's a decrease. You're tripping yourself up focusing on units. They’re paying the same, but the units depreciated because the oligarchs want workers’ wages to go down. > If you treat it as one you'll have a bad time. Just like if you treated your horse as a boat. Or treat a savings account as a savings account.
- AngrySkillzz 6y ago
  > Only because the wealthy benefit from depreciating currency Source this claim. Everyone benefits from a depreciating currency because inflation provides a buffer against deflationary spirals that lead to large recessions and job losses for people of all classes. Tell me exactly how inflation benefits only the ultra-wealthy and not anyone else. > because the oligarchs want workers’ wages to go down. I would suggest that you clarify this claim so it does not sound so much like a conspiracy theory.
  - chordalkeyboard 6y ago
    > Source this claim. Asset price inflation vs depreciation of debt in real terms. Wealthy people hold assets that are valued in currency. Depreciating currency causes those assets to go up in nominal terms, and additionally depreciating currency causes a flight to assets. Wealthy people (by definition) have more assets than non-wealthy people, hence this flight from currency to assets bids up the prices of assets. > Everyone benefits from a depreciating currency, because inflation provides a buffer against deflationary spirals that lead to large recessions. Thats a theory-laden and motivated explanation. Surely you can do better than just argument by assertion? > Tell me exactly how inflation benefits only the ultra-wealthy and not anyone else. Thats not my claim. > I would suggest that you clarify this claim so it does not sound so much like a conspiracy theory. I suggest you do your own research and discover that the central bank is very much fact and not at all theory.

deleted 6y ago

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neilwilson 6y ago

"anyone who relies on fixed payments denominated in dollars (retirees, pensioners, disabled persons, those on public assistance, etc.). All those people are, or should be, index-linked. But they are a convenient human shield for the real culprits. The people who actually rely on fixed incomes are those holding the debt assets that rot by inflation - ie bankers and rich people. Inflation helps debt payers by transfers from debt holders. However it is the latter that have the political power. Nobody else is affected by inflation. They are affected by the systemic lack of jobs induced by a central bank system that is overly tight to avoid inflation that never happens.