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Right, but it's not. The idea that inflation "dilutes" wealth and is therefore bad for rich people is not true.

edgyquant 5y ago
It would be if rich people held all their money in cash like Smaug in his mountain, but anyone familiar with the current monetary system would know that people invest in assets to prevent losing out to inflation and this is what we’re going for with a steady inflation rate. Keeps the economy pumping and in times when we hit a recession (not depressions, since we don’t really have those anymore thanks to our modern monetary policy) those same rich people want to get their freed up assets into the economy as quickly as possible.
JuliusBranson 5y ago
Correct. Inflation is when the dollar gets weaker for the masses because the elite are printing themselves dollars. Deflation is when the dollar gets stronger for the masses because the elite's proportion of the national currency is decreasing. We have pro-inflation, anti-deflation economic ideology because the elite fund the economists' "research."
- ineptech 5y ago
  Stronger/weaker refer to the value of a dollar compared to other currencies; inflation/deflation refer to the value of a dollar compared to goods and services. Neither is related to the "elite's proportion of the national currency". Again, I can only suggest reading some articles about this stuff. > We have pro-inflation, anti-deflation economic ideology because the elite fund the economists' "research." Suppose USD deflated; what would happen? Some people would move some money from other assets (stocks/bonds/etc) into currency and hold it for risk-free returns. What would that do? Reduce the amount of money in circulation. What does that do? Deflate the currency even more. What does that do? Incentivize even more people to move money into currency, which makes the currency deflate even more. The whole point of a currency is that people spend it or invest it in something useful. If it's going up in value, they're incentivized not to do that, and it stops being used as a currency. This is an unambiguously bad outcome. I don't believe shadow elites are trying to convince economists of this, because they're already convinced.

It would be if rich people held all their money in cash like Smaug in his mountain, but anyone familiar with the current monetary system would know that people invest in assets to prevent losing out to inflation and this is what we’re going for with a steady inflation rate. Keeps the economy pumping and in times when we hit a recession (not depressions, since we don’t really have those anymore thanks to our modern monetary policy) those same rich people want to get their freed up assets into the economy as quickly as possible.

JuliusBranson 5y ago

Correct. Inflation is when the dollar gets weaker for the masses because the elite are printing themselves dollars. Deflation is when the dollar gets stronger for the masses because the elite's proportion of the national currency is decreasing. We have pro-inflation, anti-deflation economic ideology because the elite fund the economists' "research."

ineptech 5y ago
Stronger/weaker refer to the value of a dollar compared to other currencies; inflation/deflation refer to the value of a dollar compared to goods and services. Neither is related to the "elite's proportion of the national currency". Again, I can only suggest reading some articles about this stuff. > We have pro-inflation, anti-deflation economic ideology because the elite fund the economists' "research." Suppose USD deflated; what would happen? Some people would move some money from other assets (stocks/bonds/etc) into currency and hold it for risk-free returns. What would that do? Reduce the amount of money in circulation. What does that do? Deflate the currency even more. What does that do? Incentivize even more people to move money into currency, which makes the currency deflate even more. The whole point of a currency is that people spend it or invest it in something useful. If it's going up in value, they're incentivized not to do that, and it stops being used as a currency. This is an unambiguously bad outcome. I don't believe shadow elites are trying to convince economists of this, because they're already convinced.