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Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression. The rich are already keeping most of their wealth in as
by lifty 5y ago
Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression. The rich are already keeping most of their wealth in assets that keep up with inflation, or even outpace it, which exacerbates the inequality issue even more. The only thing that inflation is good at is reducing debt levels, both for individuals and organisations.
- rcMgD2BwE72F 5y ago>Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression. Not really. If I owe some money, every increase in prices (and wages) make it easier for me to reimburse my loan. The rich lending money will be losing, big time. Now, do rich people lend their money? I'm sure they do. They may own stocks, real estate and commodities in addition to currencies and obligations but their value will drop hard if they stop lending money. The rich, as a class, can't protect themselves from inflation even if they start buying stuff that appreciate by selling the rest. A few may find a hedge against this, but the exception proves the rule.
- lifty 5y agoIf the value of assets drops you get a deflation and central banks hate that, so in practice what happens is that asset values get propped up on an ongoing basis. This is the situation we are finding ourselves now.