5 ms·

The poorest have a negative net worth, so inflation reduces their debt. The next lot have some wealth in property and pensions. Property especially benefits fr

The poorest have a negative net worth, so inflation reduces their debt. The next lot have some wealth in property and pensions. Property especially benefits from inflation as the remaining mortgage reduces as a %age Now sue, if inflation is high and wages don't increase with inflation that does effect the poorest, but the poorest are screwed anyway. Median savings account levels based on earnings: Bottom 20% of earners: $600 20th to 39.9th percentile: $1,700 40th to 59.9th percentile: $3,800 60th to 79.9th percentile: $8,200 80th to 89.9th percentile: $18,700 Top 10% of earners: $62,000

ptero 6y ago
> The poorest have a negative net worth, so inflation reduces their debt Yes, and it helps those who got into debt some time in the past, and without this debt have a positive cash flow today; for example a graduate making good salary but saddled with old student loans. But I think (although not 100% sure) most poorer people in debt do not have a positive cash flow even when not counting debt payment. They are getting deeper into debt because they spend more than they get. And inflation will probably push those people deeper into the hole: they are on bare essentials (cannot cut those; and they are getting more expensive), and their jobs are more likely to be cut. Richer folks by comparison have many options to hedge against inflation, from property sprinkled around the world to commodities, precious metals in cold storage, inflation-resistant stocks, etc. My 2c.
vladimirralev 6y ago
The poor can only take high premium inflation adjusted loans. Inflation doesn't reduce the burden. The poor would generally make minimum wage ($7.25 in the US for about 15-20 years now). Same people who say there is no inflation call this "a starvation wage" never making the link between printing money and the wages pushing poor people into starvation. The poor spend most of their money on housing, food, medical and energy. All of which are massively up (6% up YoY average last week). Food and energy of course are ignored in headline inflation as a rule.
henvic 6y ago
Only if you consider the poorest living in a mortgaged house that costs $800,000 with $720,000 left to pay while making $120,000 a year. This is not valid for the poor people making $15,000 a year with $600 in their bank account. These people are losing a lot of wealth. Debt is not that easily accessed by everyone! And when it comes at the cost of inflation as it often (or even almost always!) does, it's even worse.
- iso1210 6y ago
  They aren't losing a lot of wealth, they don't have it.
  - henvic 6y ago
    What you say doesn't make any sense. For someone poor with $50 of savings, if they lose $5 it might not seem much to you, but it might be to them. It actually is a lot of money if you're considering someone really poor, especially in poorer countries. I assume you're probably in the US and think that making money is as easy as it is for most people there everywhere. No, it is not easy for everyone, and not everyone lives in the US.

ptero 6y ago

> The poorest have a negative net worth, so inflation reduces their debt Yes, and it helps those who got into debt some time in the past, and without this debt have a positive cash flow today; for example a graduate making good salary but saddled with old student loans. But I think (although not 100% sure) most poorer people in debt do not have a positive cash flow even when not counting debt payment. They are getting deeper into debt because they spend more than they get. And inflation will probably push those people deeper into the hole: they are on bare essentials (cannot cut those; and they are getting more expensive), and their jobs are more likely to be cut. Richer folks by comparison have many options to hedge against inflation, from property sprinkled around the world to commodities, precious metals in cold storage, inflation-resistant stocks, etc. My 2c.

vladimirralev 6y ago

The poor can only take high premium inflation adjusted loans. Inflation doesn't reduce the burden. The poor would generally make minimum wage ($7.25 in the US for about 15-20 years now). Same people who say there is no inflation call this "a starvation wage" never making the link between printing money and the wages pushing poor people into starvation. The poor spend most of their money on housing, food, medical and energy. All of which are massively up (6% up YoY average last week). Food and energy of course are ignored in headline inflation as a rule.

henvic 6y ago

Only if you consider the poorest living in a mortgaged house that costs $800,000 with $720,000 left to pay while making $120,000 a year. This is not valid for the poor people making $15,000 a year with $600 in their bank account. These people are losing a lot of wealth. Debt is not that easily accessed by everyone! And when it comes at the cost of inflation as it often (or even almost always!) does, it's even worse.

iso1210 6y ago
They aren't losing a lot of wealth, they don't have it.
- henvic 6y ago
  What you say doesn't make any sense. For someone poor with $50 of savings, if they lose $5 it might not seem much to you, but it might be to them. It actually is a lot of money if you're considering someone really poor, especially in poorer countries. I assume you're probably in the US and think that making money is as easy as it is for most people there everywhere. No, it is not easy for everyone, and not everyone lives in the US.