4 ms·

Inflation is also bad for wage earners, reducing the value of their wages. Inflation is good for debtors, however, reducing the value of the principal, and sim

Inflation is also bad for wage earners, reducing the value of their wages. Inflation is good for debtors, however, reducing the value of the principal, and similarly bad for creditors. High inflation is bad for almost everyone.

esalman 4y ago
Can attest. Right now we're priced out of the housing market because of inflation.
- wolverine876 4y ago
  The housing market has been inflating for a long time, on its own.
  - eppp 4y ago
    Hardly on its own. I would wager in a large part due to terrible government policies and their NIMBY enablers.
    - bb88 4y ago
      Well, also because people want to live in places where there is no land left to build.
      - eppp 4y ago
        There is plenty of air to build in, just requires some minor restrictions to be lifted.
- lamontcg 4y ago
  Housing is an asset not inflation. If inflation was running hot persistently at like 6% then long term interest rates would be higher and housing prices would fall in nominal terms compared to wages. The low-inflation, low-interest rate environment has produced high asset valuations due to the cheapness of borrowing money. There is an important distinction on the spectrum between consumable things bought with wages and investments bought with borrowed money, and the rise in prices in those categories are different. If you want to play the semantic game that all rises in any prices are inflation there is a real distinction that you're missing -- in which case we should talk about asset inflation vs. price inflation vs. wage inflation as being different inflations and stop talking about it like its the same thing (which economists would tell you it isn't by arguing that you're talking about assets and not inflation, but now we've just gone in a circle talking past each other because of definitions).
  - bradDonniger 4y ago
    “Real distinction” is a semantic game. In fact how we label the numbers is all semantic games. We’re insulating an aging gerontocracy at the expense of the next generation. That’s ageism. We’re on the hook for their contracts, their businesses agreements. I never signed anything. They’ve successfully leveraged their propaganda spewing media companies to convince us to coddle them and fuck the next generation; no one else matters! That’s the only real thing going on here. Everything else is semantic games. A bunch of elders raised in a more religious era built “flocks” of employees whose agency they exploit to avoid real work.
  - chordalkeyboard 4y ago
    > Housing is an asset not inflation. Inflation causes asset prices to rise. > If inflation was running hot persistently at like 6% then long term interest rates would be higher This is not true. > housing prices would fall in nominal terms compared to wages I suggest you reconsider your assertion that 6% inflation would result in lower housing prices. > The low-inflation, low-interest rate environment has produced high asset valuations due to the cheapness of borrowing money. The high asset valuations as a result of low interest rates is textbook monetary inflation. > There is an important distinction on the spectrum between consumable things bought with wages and investments bought with borrowed money, and the rise in prices in those categories are different. The prices in both those categories are affected by dilution of value as a consequence of monetary expansion and that increase in prices has a name, 'inflation'. > If you want to play the semantic game that all rises in any prices are inflation there is a real distinction that you're missing -- in which case we should talk about asset inflation vs. price inflation vs. wage inflation as being different inflations and stop talking about it like its the same thing (which economists would tell you it isn't by arguing that you're talking about assets and not inflation, but now we've just gone in a circle talking past each other because of definitions). The point of semantics is to enable us to communicate by having mutually understood meanings for the words we use. If you want to talk about price increases that are not a result of monetary factors, then you can just talk about the price of things going up without misappropriating the word 'inflation' and making it seem like you don't understand what the word even means.
  - georgeplusplus 4y ago
- flandish 4y ago
  I have a small heloc, about 50k. It’s all I have left on my house, mortgage wise. Currently trying to slap as much principal down on it as possible as it’s still in its “interest only” phase. Come 2024, it’ be interest and principal. Was told last year the payment will be abt 500. I reckon after rate jumps it’ll be closer to 800. Sigh.
dpweb 4y ago
Inflation is also good for those that own assets as their relative value to dollar increases. Everyone has a mix of: Debts, money they've loaned to others, amount of assets owned, and amount of dollars owned and wages (recurring income in dollars). So, inflation is most harmful to wage earners with few assets - and most helpful to non-wage earners with many assets. Increasing wealth disparity between workers (most people) and those who own the most assets. Those who own large amounts of assets largely don't own dollars - they own real estate, securities, etc.. The bank issue is a strawman - simply a matter of SVB (and others) making bad interest rate bets and losing.
- dataflow 4y ago
  > Inflation is also good for those that own assets as their relative value to dollar increases. I'm not sure what type of assets you're referring to, but I haven't exactly noticed stocks skyrocketing along with inflation. If anything they seem to have dropped in value.
  - nequo 4y ago
    With inflation, the price level increases. This means that firms' input and output prices, and as a consequence, also their profits, will increase. Unless stock prices are in a bubble right now, this should make them rebound in value later on in a way that cash won’t.
- mixedCase 4y ago
  > Inflation is also good for those that own assets as their relative value to dollar increases. That's not "good", it's just less bad, because as soon as they want to turn those assets liquid they run into the same problem. Their assets are not gaining value, they're just not losing it.
  - fragsworth 4y ago
    Physical assets generally lose "real" value on their own too, because they degrade or need maintenance. The asset prices might go up but if you sell them to buy other stuff, that other stuff also went up in price (probably higher). However, high enough inflation does benefit people who borrowed tons of money to hoard more physical assets than they can afford.

esalman 4y ago

Can attest. Right now we're priced out of the housing market because of inflation.

wolverine876 4y ago
The housing market has been inflating for a long time, on its own.
- eppp 4y ago
  Hardly on its own. I would wager in a large part due to terrible government policies and their NIMBY enablers.
  - bb88 4y ago
    Well, also because people want to live in places where there is no land left to build.
    - eppp 4y ago
      There is plenty of air to build in, just requires some minor restrictions to be lifted.
lamontcg 4y ago
Housing is an asset not inflation. If inflation was running hot persistently at like 6% then long term interest rates would be higher and housing prices would fall in nominal terms compared to wages. The low-inflation, low-interest rate environment has produced high asset valuations due to the cheapness of borrowing money. There is an important distinction on the spectrum between consumable things bought with wages and investments bought with borrowed money, and the rise in prices in those categories are different. If you want to play the semantic game that all rises in any prices are inflation there is a real distinction that you're missing -- in which case we should talk about asset inflation vs. price inflation vs. wage inflation as being different inflations and stop talking about it like its the same thing (which economists would tell you it isn't by arguing that you're talking about assets and not inflation, but now we've just gone in a circle talking past each other because of definitions).
- bradDonniger 4y ago
  “Real distinction” is a semantic game. In fact how we label the numbers is all semantic games. We’re insulating an aging gerontocracy at the expense of the next generation. That’s ageism. We’re on the hook for their contracts, their businesses agreements. I never signed anything. They’ve successfully leveraged their propaganda spewing media companies to convince us to coddle them and fuck the next generation; no one else matters! That’s the only real thing going on here. Everything else is semantic games. A bunch of elders raised in a more religious era built “flocks” of employees whose agency they exploit to avoid real work.
- chordalkeyboard 4y ago
  > Housing is an asset not inflation. Inflation causes asset prices to rise. > If inflation was running hot persistently at like 6% then long term interest rates would be higher This is not true. > housing prices would fall in nominal terms compared to wages I suggest you reconsider your assertion that 6% inflation would result in lower housing prices. > The low-inflation, low-interest rate environment has produced high asset valuations due to the cheapness of borrowing money. The high asset valuations as a result of low interest rates is textbook monetary inflation. > There is an important distinction on the spectrum between consumable things bought with wages and investments bought with borrowed money, and the rise in prices in those categories are different. The prices in both those categories are affected by dilution of value as a consequence of monetary expansion and that increase in prices has a name, 'inflation'. > If you want to play the semantic game that all rises in any prices are inflation there is a real distinction that you're missing -- in which case we should talk about asset inflation vs. price inflation vs. wage inflation as being different inflations and stop talking about it like its the same thing (which economists would tell you it isn't by arguing that you're talking about assets and not inflation, but now we've just gone in a circle talking past each other because of definitions). The point of semantics is to enable us to communicate by having mutually understood meanings for the words we use. If you want to talk about price increases that are not a result of monetary factors, then you can just talk about the price of things going up without misappropriating the word 'inflation' and making it seem like you don't understand what the word even means.
- georgeplusplus 4y ago
flandish 4y ago
I have a small heloc, about 50k. It’s all I have left on my house, mortgage wise. Currently trying to slap as much principal down on it as possible as it’s still in its “interest only” phase. Come 2024, it’ be interest and principal. Was told last year the payment will be abt 500. I reckon after rate jumps it’ll be closer to 800. Sigh.

dpweb 4y ago

Inflation is also good for those that own assets as their relative value to dollar increases. Everyone has a mix of: Debts, money they've loaned to others, amount of assets owned, and amount of dollars owned and wages (recurring income in dollars). So, inflation is most harmful to wage earners with few assets - and most helpful to non-wage earners with many assets. Increasing wealth disparity between workers (most people) and those who own the most assets. Those who own large amounts of assets largely don't own dollars - they own real estate, securities, etc.. The bank issue is a strawman - simply a matter of SVB (and others) making bad interest rate bets and losing.

dataflow 4y ago
> Inflation is also good for those that own assets as their relative value to dollar increases. I'm not sure what type of assets you're referring to, but I haven't exactly noticed stocks skyrocketing along with inflation. If anything they seem to have dropped in value.
- nequo 4y ago
  With inflation, the price level increases. This means that firms' input and output prices, and as a consequence, also their profits, will increase. Unless stock prices are in a bubble right now, this should make them rebound in value later on in a way that cash won’t.
mixedCase 4y ago
> Inflation is also good for those that own assets as their relative value to dollar increases. That's not "good", it's just less bad, because as soon as they want to turn those assets liquid they run into the same problem. Their assets are not gaining value, they're just not losing it.
- fragsworth 4y ago
  Physical assets generally lose "real" value on their own too, because they degrade or need maintenance. The asset prices might go up but if you sell them to buy other stuff, that other stuff also went up in price (probably higher). However, high enough inflation does benefit people who borrowed tons of money to hoard more physical assets than they can afford.