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If you are not the US government or a AAA+ company such as Microsoft ...then your creditors will get inflation back from you in the form of interest and then so

If you are not the US government or a AAA+ company such as Microsoft ...then your creditors will get inflation back from you in the form of interest and then some. Never in a million years the regular borrower would be able to increase their net worth with inflation. Regular borrowers can't borrow anywhere near the consensus projected inflation rate.

kybernetikos 5y ago
Regular borrowers income increase somewhat in line with inflation. Houses bought on interest payments that seemed difficult to manage become easy to manage within a few years. I know a large number of people at the moment who have ended up with an impressive property portfolio without even trying all that hard. They bought early in their career, and the value of the property they bought inflated, their income inflated, and their debt didn't keep pace.
- ObserverNeutral 5y ago
  Again. Back to the narrative and communication issue. People ascribe credit for their rising income and increasing salary to their performance on the job....some more humble ascribe it their employer and their boss. That's who takes credit for it. For sure not inflation and for sure it's not the Fed with their 2% target. Inflation is in all the wrong places with regards to the narrative, for one reason or another only the negatives are outlined and the population somehow is very scared of it. Deflation is in the opposite spot. When deflation happens the culprit in the narrative is the economic recession/depression and the wealthy who played roulette in the stock market etc. The negatives of deflation are only known to academics, wheras the positives are known to everybody (e.g. currency strenght of the USD when you go on a trip to Mexico) It is clear to me that this might offend the economics professor, but that's the reality of it. That's the reality we all have to trade on. Narrative is very important.

kybernetikos 5y ago

Regular borrowers income increase somewhat in line with inflation. Houses bought on interest payments that seemed difficult to manage become easy to manage within a few years. I know a large number of people at the moment who have ended up with an impressive property portfolio without even trying all that hard. They bought early in their career, and the value of the property they bought inflated, their income inflated, and their debt didn't keep pace.

ObserverNeutral 5y ago
Again. Back to the narrative and communication issue. People ascribe credit for their rising income and increasing salary to their performance on the job....some more humble ascribe it their employer and their boss. That's who takes credit for it. For sure not inflation and for sure it's not the Fed with their 2% target. Inflation is in all the wrong places with regards to the narrative, for one reason or another only the negatives are outlined and the population somehow is very scared of it. Deflation is in the opposite spot. When deflation happens the culprit in the narrative is the economic recession/depression and the wealthy who played roulette in the stock market etc. The negatives of deflation are only known to academics, wheras the positives are known to everybody (e.g. currency strenght of the USD when you go on a trip to Mexico) It is clear to me that this might offend the economics professor, but that's the reality of it. That's the reality we all have to trade on. Narrative is very important.