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Inflation: -Causes people to pay taxes on capital gains even when their purchasing power hasn’t risen. -Causes borrowers to get ahead of savers and lenders.

Inflation: -Causes people to pay taxes on capital gains even when their purchasing power hasn’t risen. -Causes borrowers to get ahead of savers and lenders. -Allows governments to spend more than drunken sailors. -Causes the wealth of the rich to be eroded less than the wealth of the poor (who don’t own any assets). -Causes both the wealth of the rich, middle class, and poor to be eroded away at different rates. -Erodes away the middle class and makes them feel like wage slaves. -Caused Satoshi Nakamoto to release Bitcoin. -Isn’t stopping anytime soon.

haolez 5y ago
I live in a third world country. Can confirm.
exabrial 5y ago
Punishes savers, lower income families
- AnthonyMouse 5y ago
  To understand why that doesn't make any sense, realize that these are essentially disjoint sets. When there is inflation, wages rise with prices. But people's debts are valued in nominal dollars, so it erodes those debts. Debtors are generally poor. Moreover, savers generally invest their money instead of keeping it as cash in a mattress, and the prices of typical investment securities (e.g. stocks) rise with inflation in nominal dollars. Inflation is primarily bad for lenders, and people trading in securities derivatives that are equivalent to lending.
  - paulpauper 5y ago
    It lowers exiting debts if the inflation is sudden and comes as a surprise, but interest on new debt will be adjusted accordingly to take into account rising expected inflation
    - vkou 5y ago
      The overwhelming majority of people are not new debt-holders, but are old debt-holders. Floating rate mortgages are not common in the US. Since most of them are in debt, inflation, as long as their wages are keeping up with it is good for the overwhelming majority of Americans.
      - mostertoaster 5y ago
        This is insane. Inflation is not good for a majority of Americans. It is only ok for the upper class with lots of assets, and at times, in the short term, it benefits the lower class. It is simply a tax on the middle class who are still generally on fixed income and might own a house. I’ve saved let’s say 10 grand. Then the government gives everyone including the person who has saved nothing 5 grand. Now the new appliance I was going to buy costs more than it would because the person with no savings given 5 grand is also going to buy one. So sure the person with no savings can now also buy that appliance, and we can argue the merits of that, but ultimately the person who saved for it is robbed the increase in price, and the rich capitalist who owns the company that sells the appliance makes more money, and his assets go up in value, so he is fine. What we effectively did is tax the saver to give to the person who didn’t save.
        vkou 5y ago
        The overwhelming majority of Americans do not have a positive balance of savings minus debts. I'm not talking about the lower class, I'm talking about middle-class people who own mortgages. You may have ten grand in your bank account, but you also probably have a mortgage for another four hundred grand. Inflation to the degree that you describe would cause tens to hundreds of thousands of dollars of that debt to evaporate.
        ac29 5y ago
        > You may have ten grand in your bank account, but you also probably have a mortgage for another four hundred grand. Unless you are underwater on your mortgage, you also have an asset worth at least $400k. "Savings minus debts" is not a (good) measure of net worth.
  - teclordphrack2 5y ago
    You are incorrect. People of low incomes can save a modest amount but we choose to keep it liquid because we can come into dire straights at any time. I can't invest my money b/c I may have to buy a used car, fix a roof leak, and/or cover medical expenses.
  - srean 5y ago
    > When there is inflation, wages rise with prices. This is a key assumption and as far as I can tell wages have not kept up with inflation, at least not consistently.
onionisafruit 5y ago
> Allows governments to spend more than drunken sailors. Is also caused by governments spending more than drunken sailors.
- deleted 5y ago
  [deleted]
- hypersoar 5y ago
  We just had a 20-year period with historically high deficits and historically low inflation.
  - lettergram 5y ago
    You sure about that low inflation? Certain assets have been growing much faster than purchasing power. And wages aren’t growing all that much. Food has stayed cheap, but also the content of boxes and bags have decreased. I’m not sure what the real inflation is, but it’s definitely not “low”.
    - dragonwriter 5y ago
      > You sure about that low inflation? Yes. > Certain assets have been growing much faster than purchasing power. Assets aren't part of inflation. > And wages aren’t growing all that much. Yes, that's typical with low inflation, since inflation both pushes wages up and is pushed by wage rises. It would be weird to have low inflation without nominal wages that are stagnant.
      - jackcosgrove 5y ago
        Assets aren't part of consumer price inflation, which is the most politically sensitive because everyone buys food, etc. But asset price inflation can have negative effects on some, while it has positive effects for others. The murkier political calculus of winners vs losers makes asset price inflation less of a hot topic, but it does happen.
paulpauper 5y ago
the rich do well in all environments except for major econ crisis like 2008 or 1929 but they tend recover the fastest too.
Spooky23 5y ago
The poor have no wealth. Jeff Bezos lost more money to inflation this quarter than the sum of wealth of the 50th percentile of Americans. We’re overdue for inflation and higher rates. Too many stupid businesses are thriving, and too many industries have consolidated into little cartels due to cheap money.
- mbrumlow 5y ago
  Thomo Bravo To name one.
- RickJWagner 5y ago
  No. People who have no wealth are just farther behind. If you can't afford a $100 coat because you have no money, you fall into despair when the price of the coat goes to $200 and you have no money. Everything is farther out of reach.
  - Spooky23 5y ago
    Except that’s not how inflation has manifested today. Consumer products are deflationary, powered by the unlimited potential of Asian and other workshops.
  - bumby 5y ago
    But this assumes only commodity inflation without wage inflation.
AnthonyMouse 5y ago
Nearly all of those aren't true. > -Causes people to pay taxes on capital gains even when their purchasing power hasn’t risen. This one is actually true. We could easily fix it by calculating capital gains as adjusted for inflation (and make up the revenue by using the ordinary income rate instead of the capital gains rate). > -Causes borrowers to get ahead of savers and lenders. Savers who don't stupidly hold their savings in cash are unaffected, since securities prices increase with inflation. Lenders are affected, but most lenders are banks, who are lending using fractional reserve banking, i.e. the money they lend is created when they make the loan and destroyed when it's paid back. The fact that it's worth less when it's paid back doesn't really affect them. > -Allows governments to spend more than drunken sailors. This is generally the cause rather than the consequence. > -Causes the wealth of the rich to be eroded less than the wealth of the poor (who don’t own any assets). The primary thing it erodes is contracts (i.e. loans) denominated in nominal dollars. In other words, it devalues nominal debts. This is generally good for the poor and bad for any rich lenders who aren't lending using fractional reserve banking. > -Causes both the wealth of the rich, middle class, and poor to be eroded away at different rates. This is true of nearly anything, but who comes out ahead depends more on factors like "are you a net borrow or lender" than your annual income or net worth. > -Erodes away the middle class and makes them feel like wage slaves. This is caused by low interest rates more than inflation, though they're somewhat related. The basic problem is that if money is cheap to borrow, people borrow it and bid up asset prices, and then people who don't already have assets (e.g. a home) are forced to buy high.
- webinvest 5y ago
  >> -Causes borrowers to get ahead of savers and lenders. > Savers who don't stupidly hold their savings in cash are unaffected, since securities prices increase with inflation. Savers save money in their savings account or in other accounts. Investors both save and buy appreciating assets. Savors hold savings, investors hold appreciating (or sometimes depreciating) assets. >> -Allows governments to spend more than drunken sailors. >This is generally the cause rather than the consequence. They’re both correct. The Cantillon Effect, not having to raise taxes from a new bill, and being able to inflate the debt away are all seductive to those with the means to use it. > This is caused by low interest rates more than inflation, though they're somewhat related. The basic problem is that if money is cheap to borrow, people borrow it and bid up asset prices, and then people who don't already have assets (e.g. a home) are forced to buy high. Employee wages at the same company typically don’t rise to meet inflation. In the few companies that do, the employees still move higher up the income tax brackets. >> -Causes people to pay taxes on capital gains even when their purchasing power hasn’t risen. >This one is actually true. We could easily fix it by calculating capital gains as adjusted for inflation (and make up the revenue by using the ordinary income rate instead of the capital gains rate). True.
RC_ITR 5y ago
>Causes the wealth of the rich to be eroded less than the wealth of the poor (who don’t own any assets). This is such a weird and oft repeated lie [0], when in reality the poor are mostly net-debtors (even the ones who seem well off, given their mortgage) who benefit from inflation. 0: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/ https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
- Aunche 5y ago
  That's only true if they're in the process of pay off their debt rather than accumulating more debt, in which case they'd suffer from higher interest rates.
rat87 5y ago
> -Causes borrowers to get ahead of savers and lenders. Poor people tend to be borrowers. > -Allows governments to spend more than drunken sailors. Government spends stuff for people, including imopratant future investments. Also its silly to compare government spending to personal spending > -Causes the wealth of the rich to be eroded less than the wealth of the poor (who don’t own any assets). Except poor people are more likely to be badly in debt. > -Erodes away the middle class and makes them feel like wage slaves. A healthy inflation rate helps drive the economy. Loss of union power is responsible for poor and middle class not getting their fair share. > -Caused Satoshi Nakamoto to release Bitcoin. Isn't really useful for anything other then speculation. The fact that it's inherently deflationary prevents it from being a useful currency. > -Isn’t stopping anytime soon. Inflation for the year isn't likely to be much higher then normal and a constant rate of inflation is good for the economy.
- gruez 5y ago
  >> -Caused Satoshi Nakamoto to release Bitcoin. >Isn't really useful for anything other then speculation. The fact that it's inherently deflationary prevents it from being a useful currency. I don't think he's saying it's useful or not, just that it's a consequence of inflation. If anything he's anti-bitcoin, given that the other items on the list are mostly negative.
  - BostonFern 5y ago
    The whole comment is a new-old rhetorical piece erecting a pedestal to seat on a savior in a sea of the preceding enumeration of wrongs.
- BenoitEssiambre 5y ago
  And most importantly, in a situation where real production efficiency dropped because of covid 19, failing to allow prices to adjust upwards (and real wages to adjust downwards) to allow the economy to adapt to the situation would put the labor markets in a gridlock and make tons of workers unemployed/underemployed and thus much poorer. Inflation is what allows people to have jobs and contribute to productivity despite the unprecedented health crisis.
imtringued 5y ago
What did you expect? The money system you love so much is so deeply unfair that not even reality will deny it's unfairness. >-Causes borrowers to get ahead of savers and lenders. When lenders expect interest rates that go above and beyond economic growth then either the loan contract will be void or the interest rate has to be lowered. The last bastion of the economic system that cannot be avoided is the devaluation of the currency used in the contract. At least that part refuses to deny reality. We should be proud that our system isn't completely dysfunctional. This means lenders are punished for risky and extortionate lending. For some reason people have "savers = good" wired into their brain even when the saver and lender do not have the best interest of the borrower in mind and only see the borrower as a pinata ready to be plundered. >-Allows governments to spend more than drunken sailors. When the capitalists build too much capital you end up with excess capacity in the economy. You either take it or destroy it. The latter has often motivated wars. Of course with the capitalist spirit there is no such thing as leisure and freedom from work so destroying the capital and starting over is preferred rather than doing large scale government projects. In a positive interest currency the existence of huge government spending is integrated into the currency otherwise the currency would fail a lot sooner. >-Causes the wealth of the rich to be eroded less than the wealth of the poor (who don’t own any assets). The poor keep most of their wealth in the form of their body. As long as they are healthy and young they can work which means they can earn money. No, the $400 in your bank account aren't most of your wealth. Now let me tell you something interesting. The bottom 80% lenders are net interest payers meaning that they get less in interest out than they pay on interest because businesses borrow money with interest and every product you buy has its price increased to cover interest. When the interest rate is extortionate then inflation reverts that extortion. So yes inflation creates inequality because it lets a monetary system function which encourages extortionate interest but don't make the mistake that it is just inflation alone, it's always interest+inflation and inflation always lags behind. >-Causes both the wealth of the rich, middle class, and poor to be eroded away at different rates. Sure but since the goal of inflation is to reduce extortionate interest you don't have many choices. The only real alternative would be to integrate inflation into the money system i.e. a permanent negate interest on cash which gives enough room to earn a return on 0% interest. The benefit would be that it is highly predictable and fair to everyone. It would do away with economic cycles and unemployment and a lot of factors that drive inequality. >-Erodes away the middle class and makes them feel like wage slaves. Well, now you have gotten things backwards. High interest debts with low inflation cause people to feel like wage slaves. The worst thing that inflation does is maintain such a system. Otherwise the system would have failed a long time ago. Have you ever wondered why interest rates are dropping? Because you cannot squeeze out blood from a stone. There aren't any borrowers left who can bear the burden of higher interest rates. Raising interest rates because of a fetish for higher interest rates would kill the economy and cause unemployment because positive interest above the growth rate never made sense to begin with. >-Caused Satoshi Nakamoto to release Bitcoin. The current fiat system is just terrible. Bitcoin is just a continuation of the current system. Bitcoin is the very thing that it despises. Bitcoin mining is the largest portion of the Bitcoin economy. It doesn't really make sense to speak of naturally occurring Bitcoin, the mining algorithm can be considered a form of government spending that creates money out of thin air. What does that tell us about Bitcoin and our own system? If there is a shortage of money and money is being created, people will work at the source of that money. Miners work to hash data. Construction workers do so to build bridges. This idea only makes sense because we want money to be scarce. We want the ability to extort other people by withholding money without their consent. Before you say that the banking system lends out money and makes it available again think about what happens when you lower the interest rate below 0%. People will take out their cash. Why? Because they insist on their ability to extort. The government doesn't care about the hostages so it creates replacements and you end up with inflation. >-Isn’t stopping anytime soon. Sure, as I said inflation is what keeps the system alive and from collapsing. You'll have inflation as long as the money system needs it to stay alive. All of this garbage because people either know or don't know that money represents a claim to another persons time. You can't save time. You can't wait for a better day because all the days before that will be gone. Marx was an idiot. There is nothing extortionate about building a factory, employing workers and taking the risk of the business failing. There is something exceedingly extortionate about withholding money because it is used to pay salaries. If there is no money you cannot pay salaries. Rather than seizing the means of production he should have seized the means of employment (money). If there is no money in the local community then people cannot work. If they create their own money and start working then the central bank will come to their community and tell them "No you cannot work, no you cannot make your community a better place, no you are not allowed to escape poverty". So our last hope is that CBDCs are designed as complementary currency with a holding fee. What a stupid world.

haolez 5y ago

I live in a third world country. Can confirm.

exabrial 5y ago

Punishes savers, lower income families

AnthonyMouse 5y ago
To understand why that doesn't make any sense, realize that these are essentially disjoint sets. When there is inflation, wages rise with prices. But people's debts are valued in nominal dollars, so it erodes those debts. Debtors are generally poor. Moreover, savers generally invest their money instead of keeping it as cash in a mattress, and the prices of typical investment securities (e.g. stocks) rise with inflation in nominal dollars. Inflation is primarily bad for lenders, and people trading in securities derivatives that are equivalent to lending.
- paulpauper 5y ago
  It lowers exiting debts if the inflation is sudden and comes as a surprise, but interest on new debt will be adjusted accordingly to take into account rising expected inflation
  - vkou 5y ago
    The overwhelming majority of people are not new debt-holders, but are old debt-holders. Floating rate mortgages are not common in the US. Since most of them are in debt, inflation, as long as their wages are keeping up with it is good for the overwhelming majority of Americans.
    - mostertoaster 5y ago
      This is insane. Inflation is not good for a majority of Americans. It is only ok for the upper class with lots of assets, and at times, in the short term, it benefits the lower class. It is simply a tax on the middle class who are still generally on fixed income and might own a house. I’ve saved let’s say 10 grand. Then the government gives everyone including the person who has saved nothing 5 grand. Now the new appliance I was going to buy costs more than it would because the person with no savings given 5 grand is also going to buy one. So sure the person with no savings can now also buy that appliance, and we can argue the merits of that, but ultimately the person who saved for it is robbed the increase in price, and the rich capitalist who owns the company that sells the appliance makes more money, and his assets go up in value, so he is fine. What we effectively did is tax the saver to give to the person who didn’t save.
      - vkou 5y ago
        The overwhelming majority of Americans do not have a positive balance of savings minus debts. I'm not talking about the lower class, I'm talking about middle-class people who own mortgages. You may have ten grand in your bank account, but you also probably have a mortgage for another four hundred grand. Inflation to the degree that you describe would cause tens to hundreds of thousands of dollars of that debt to evaporate.
        ac29 5y ago
        > You may have ten grand in your bank account, but you also probably have a mortgage for another four hundred grand. Unless you are underwater on your mortgage, you also have an asset worth at least $400k. "Savings minus debts" is not a (good) measure of net worth.
- teclordphrack2 5y ago
  You are incorrect. People of low incomes can save a modest amount but we choose to keep it liquid because we can come into dire straights at any time. I can't invest my money b/c I may have to buy a used car, fix a roof leak, and/or cover medical expenses.
- srean 5y ago
  > When there is inflation, wages rise with prices. This is a key assumption and as far as I can tell wages have not kept up with inflation, at least not consistently.

onionisafruit 5y ago

> Allows governments to spend more than drunken sailors. Is also caused by governments spending more than drunken sailors.

deleted 5y ago
[deleted]
hypersoar 5y ago
We just had a 20-year period with historically high deficits and historically low inflation.
- lettergram 5y ago
  You sure about that low inflation? Certain assets have been growing much faster than purchasing power. And wages aren’t growing all that much. Food has stayed cheap, but also the content of boxes and bags have decreased. I’m not sure what the real inflation is, but it’s definitely not “low”.
  - dragonwriter 5y ago
    > You sure about that low inflation? Yes. > Certain assets have been growing much faster than purchasing power. Assets aren't part of inflation. > And wages aren’t growing all that much. Yes, that's typical with low inflation, since inflation both pushes wages up and is pushed by wage rises. It would be weird to have low inflation without nominal wages that are stagnant.
    - jackcosgrove 5y ago
      Assets aren't part of consumer price inflation, which is the most politically sensitive because everyone buys food, etc. But asset price inflation can have negative effects on some, while it has positive effects for others. The murkier political calculus of winners vs losers makes asset price inflation less of a hot topic, but it does happen.

paulpauper 5y ago

the rich do well in all environments except for major econ crisis like 2008 or 1929 but they tend recover the fastest too.

Spooky23 5y ago

The poor have no wealth. Jeff Bezos lost more money to inflation this quarter than the sum of wealth of the 50th percentile of Americans. We’re overdue for inflation and higher rates. Too many stupid businesses are thriving, and too many industries have consolidated into little cartels due to cheap money.

mbrumlow 5y ago
Thomo Bravo To name one.
RickJWagner 5y ago
No. People who have no wealth are just farther behind. If you can't afford a $100 coat because you have no money, you fall into despair when the price of the coat goes to $200 and you have no money. Everything is farther out of reach.
- Spooky23 5y ago
  Except that’s not how inflation has manifested today. Consumer products are deflationary, powered by the unlimited potential of Asian and other workshops.
- bumby 5y ago
  But this assumes only commodity inflation without wage inflation.

AnthonyMouse 5y ago

Nearly all of those aren't true. > -Causes people to pay taxes on capital gains even when their purchasing power hasn’t risen. This one is actually true. We could easily fix it by calculating capital gains as adjusted for inflation (and make up the revenue by using the ordinary income rate instead of the capital gains rate). > -Causes borrowers to get ahead of savers and lenders. Savers who don't stupidly hold their savings in cash are unaffected, since securities prices increase with inflation. Lenders are affected, but most lenders are banks, who are lending using fractional reserve banking, i.e. the money they lend is created when they make the loan and destroyed when it's paid back. The fact that it's worth less when it's paid back doesn't really affect them. > -Allows governments to spend more than drunken sailors. This is generally the cause rather than the consequence. > -Causes the wealth of the rich to be eroded less than the wealth of the poor (who don’t own any assets). The primary thing it erodes is contracts (i.e. loans) denominated in nominal dollars. In other words, it devalues nominal debts. This is generally good for the poor and bad for any rich lenders who aren't lending using fractional reserve banking. > -Causes both the wealth of the rich, middle class, and poor to be eroded away at different rates. This is true of nearly anything, but who comes out ahead depends more on factors like "are you a net borrow or lender" than your annual income or net worth. > -Erodes away the middle class and makes them feel like wage slaves. This is caused by low interest rates more than inflation, though they're somewhat related. The basic problem is that if money is cheap to borrow, people borrow it and bid up asset prices, and then people who don't already have assets (e.g. a home) are forced to buy high.

webinvest 5y ago
>> -Causes borrowers to get ahead of savers and lenders. > Savers who don't stupidly hold their savings in cash are unaffected, since securities prices increase with inflation. Savers save money in their savings account or in other accounts. Investors both save and buy appreciating assets. Savors hold savings, investors hold appreciating (or sometimes depreciating) assets. >> -Allows governments to spend more than drunken sailors. >This is generally the cause rather than the consequence. They’re both correct. The Cantillon Effect, not having to raise taxes from a new bill, and being able to inflate the debt away are all seductive to those with the means to use it. > This is caused by low interest rates more than inflation, though they're somewhat related. The basic problem is that if money is cheap to borrow, people borrow it and bid up asset prices, and then people who don't already have assets (e.g. a home) are forced to buy high. Employee wages at the same company typically don’t rise to meet inflation. In the few companies that do, the employees still move higher up the income tax brackets. >> -Causes people to pay taxes on capital gains even when their purchasing power hasn’t risen. >This one is actually true. We could easily fix it by calculating capital gains as adjusted for inflation (and make up the revenue by using the ordinary income rate instead of the capital gains rate). True.

RC_ITR 5y ago

>Causes the wealth of the rich to be eroded less than the wealth of the poor (who don’t own any assets). This is such a weird and oft repeated lie [0], when in reality the poor are mostly net-debtors (even the ones who seem well off, given their mortgage) who benefit from inflation. 0: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/ https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

Aunche 5y ago
That's only true if they're in the process of pay off their debt rather than accumulating more debt, in which case they'd suffer from higher interest rates.

rat87 5y ago

> -Causes borrowers to get ahead of savers and lenders. Poor people tend to be borrowers. > -Allows governments to spend more than drunken sailors. Government spends stuff for people, including imopratant future investments. Also its silly to compare government spending to personal spending > -Causes the wealth of the rich to be eroded less than the wealth of the poor (who don’t own any assets). Except poor people are more likely to be badly in debt. > -Erodes away the middle class and makes them feel like wage slaves. A healthy inflation rate helps drive the economy. Loss of union power is responsible for poor and middle class not getting their fair share. > -Caused Satoshi Nakamoto to release Bitcoin. Isn't really useful for anything other then speculation. The fact that it's inherently deflationary prevents it from being a useful currency. > -Isn’t stopping anytime soon. Inflation for the year isn't likely to be much higher then normal and a constant rate of inflation is good for the economy.

gruez 5y ago
>> -Caused Satoshi Nakamoto to release Bitcoin. >Isn't really useful for anything other then speculation. The fact that it's inherently deflationary prevents it from being a useful currency. I don't think he's saying it's useful or not, just that it's a consequence of inflation. If anything he's anti-bitcoin, given that the other items on the list are mostly negative.
- BostonFern 5y ago
  The whole comment is a new-old rhetorical piece erecting a pedestal to seat on a savior in a sea of the preceding enumeration of wrongs.
BenoitEssiambre 5y ago
And most importantly, in a situation where real production efficiency dropped because of covid 19, failing to allow prices to adjust upwards (and real wages to adjust downwards) to allow the economy to adapt to the situation would put the labor markets in a gridlock and make tons of workers unemployed/underemployed and thus much poorer. Inflation is what allows people to have jobs and contribute to productivity despite the unprecedented health crisis.

imtringued 5y ago

What did you expect? The money system you love so much is so deeply unfair that not even reality will deny it's unfairness. >-Causes borrowers to get ahead of savers and lenders. When lenders expect interest rates that go above and beyond economic growth then either the loan contract will be void or the interest rate has to be lowered. The last bastion of the economic system that cannot be avoided is the devaluation of the currency used in the contract. At least that part refuses to deny reality. We should be proud that our system isn't completely dysfunctional. This means lenders are punished for risky and extortionate lending. For some reason people have "savers = good" wired into their brain even when the saver and lender do not have the best interest of the borrower in mind and only see the borrower as a pinata ready to be plundered. >-Allows governments to spend more than drunken sailors. When the capitalists build too much capital you end up with excess capacity in the economy. You either take it or destroy it. The latter has often motivated wars. Of course with the capitalist spirit there is no such thing as leisure and freedom from work so destroying the capital and starting over is preferred rather than doing large scale government projects. In a positive interest currency the existence of huge government spending is integrated into the currency otherwise the currency would fail a lot sooner. >-Causes the wealth of the rich to be eroded less than the wealth of the poor (who don’t own any assets). The poor keep most of their wealth in the form of their body. As long as they are healthy and young they can work which means they can earn money. No, the $400 in your bank account aren't most of your wealth. Now let me tell you something interesting. The bottom 80% lenders are net interest payers meaning that they get less in interest out than they pay on interest because businesses borrow money with interest and every product you buy has its price increased to cover interest. When the interest rate is extortionate then inflation reverts that extortion. So yes inflation creates inequality because it lets a monetary system function which encourages extortionate interest but don't make the mistake that it is just inflation alone, it's always interest+inflation and inflation always lags behind. >-Causes both the wealth of the rich, middle class, and poor to be eroded away at different rates. Sure but since the goal of inflation is to reduce extortionate interest you don't have many choices. The only real alternative would be to integrate inflation into the money system i.e. a permanent negate interest on cash which gives enough room to earn a return on 0% interest. The benefit would be that it is highly predictable and fair to everyone. It would do away with economic cycles and unemployment and a lot of factors that drive inequality. >-Erodes away the middle class and makes them feel like wage slaves. Well, now you have gotten things backwards. High interest debts with low inflation cause people to feel like wage slaves. The worst thing that inflation does is maintain such a system. Otherwise the system would have failed a long time ago. Have you ever wondered why interest rates are dropping? Because you cannot squeeze out blood from a stone. There aren't any borrowers left who can bear the burden of higher interest rates. Raising interest rates because of a fetish for higher interest rates would kill the economy and cause unemployment because positive interest above the growth rate never made sense to begin with. >-Caused Satoshi Nakamoto to release Bitcoin. The current fiat system is just terrible. Bitcoin is just a continuation of the current system. Bitcoin is the very thing that it despises. Bitcoin mining is the largest portion of the Bitcoin economy. It doesn't really make sense to speak of naturally occurring Bitcoin, the mining algorithm can be considered a form of government spending that creates money out of thin air. What does that tell us about Bitcoin and our own system? If there is a shortage of money and money is being created, people will work at the source of that money. Miners work to hash data. Construction workers do so to build bridges. This idea only makes sense because we want money to be scarce. We want the ability to extort other people by withholding money without their consent. Before you say that the banking system lends out money and makes it available again think about what happens when you lower the interest rate below 0%. People will take out their cash. Why? Because they insist on their ability to extort. The government doesn't care about the hostages so it creates replacements and you end up with inflation. >-Isn’t stopping anytime soon. Sure, as I said inflation is what keeps the system alive and from collapsing. You'll have inflation as long as the money system needs it to stay alive. All of this garbage because people either know or don't know that money represents a claim to another persons time. You can't save time. You can't wait for a better day because all the days before that will be gone. Marx was an idiot. There is nothing extortionate about building a factory, employing workers and taking the risk of the business failing. There is something exceedingly extortionate about withholding money because it is used to pay salaries. If there is no money you cannot pay salaries. Rather than seizing the means of production he should have seized the means of employment (money). If there is no money in the local community then people cannot work. If they create their own money and start working then the central bank will come to their community and tell them "No you cannot work, no you cannot make your community a better place, no you are not allowed to escape poverty". So our last hope is that CBDCs are designed as complementary currency with a holding fee. What a stupid world.