5 ms·
>When the percentage increase of the currency is faster(most fiat) than the value of the assets increases over time, and opposite of what you say, it(being asse
by tfehring 5y ago
>When the percentage increase of the currency is faster(most fiat) than the value of the assets increases over time, and opposite of what you say, it(being assets) also becomes entrenched.
Productive assets don't entrench wealth because of inflation, they entrench wealth because they create returns to capital. The generationally wealthy would be just as wealthy relative to the rest of the population if fiat inflation had been zero for the last century. If you don't want wealth to beget more wealth you need to not only avoid deflation, but also eliminate interest, dividends, and other mechanisms by which holders of capital receive real returns to that capital.
- ItsMonkk 5y agoI don't believe this to be true, but understand that the systems involved are fairly chaotic so I'm willing to change my mind. The reason that you think these things are the drivers of wealth is that they rely on the currency/asset imbalance and then simply leverage on top of it. Fix the underlying issue, the down-stream effects goes away. I give Japan as an example of a country that just so happens to be balancing their money supply with their increase in assets. Their interest rates are flat and the only return you get on them is based on very real risk that can go the other way. Their stock markets are just about flat and is only recently hitting a new all time high after 30 years. Capital should give returns, yes, but increased productivity should be shared by all, so you should see slight wage increases.