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>The best one-sentence description of inflation I've heard is: inflation is a hidden tax on savings. People who save money are hurt the most. It's as if the new

>The best one-sentence description of inflation I've heard is: inflation is a hidden tax on savings. People who save money are hurt the most. It's as if the newly printed money is generated by taking a bit from anyone according to how much cash he/she has stored away. Who are the people who save money? Or rather, more specifically are either holding cash or in bonds whose real-yields are very negative? Tourists, downpayments, and retirees. Flipside, who is benefiting the most right now? People who are leveraged the most. Jeff Bezos and amazon isn't building all these warehouses out of pocket. These are all being financed and amortized for 25 years at tremendously low rates with real yields in the negatives. Or rather Jeff Bezos is being paid HUGE money to take on debt. Retirees are getting poorer by the day giving their money to Bezos. High inflation disproportionally benefits the ultra rich by huge degrees.

kkoncevicius 5y ago
Everyone is quick to talk bad about the "ultra rich". Ultra rich have means, they are intelligent, they have advisors, and they know how to adapt. If economy turned towards deflation those ultra-rich would liquidize their assets, store money, and benefit from that instead. When two opposing processes can benefit the rich I would say it's not in the process but in how you react to the undergoing changes and how you adapt.
- sirspacey 5y ago
  Yes and no. It slows the pace of expansion, but it doesn’t not necessarily mean they liquidate. I’ve yet to meet a billionaire who wants their net worth driven by the bond market.
imtringued 5y ago
The ultra rich have more of everything. They have more money, more stocks, more land, more intellectual property, more monopolies more of absolutely everything. Meanwhile most people keep their savings inside their body as human capital. Most people make a living by utilizing this human capital. If inflation gets them a job it is worth it.

kkoncevicius 5y ago

Everyone is quick to talk bad about the "ultra rich". Ultra rich have means, they are intelligent, they have advisors, and they know how to adapt. If economy turned towards deflation those ultra-rich would liquidize their assets, store money, and benefit from that instead. When two opposing processes can benefit the rich I would say it's not in the process but in how you react to the undergoing changes and how you adapt.

sirspacey 5y ago
Yes and no. It slows the pace of expansion, but it doesn’t not necessarily mean they liquidate. I’ve yet to meet a billionaire who wants their net worth driven by the bond market.

imtringued 5y ago

The ultra rich have more of everything. They have more money, more stocks, more land, more intellectual property, more monopolies more of absolutely everything. Meanwhile most people keep their savings inside their body as human capital. Most people make a living by utilizing this human capital. If inflation gets them a job it is worth it.