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Tell that to the economists, who predominantly say that inflation helps the poor, supposedly because they have loans.

by lifty 4y ago

rm_-rf_slash 4y ago
Less helpful for holders of credit card debt as their costs increase alongside their APR…
sidewndr46 4y ago
For some reason when I hear people saying this I just picture them as thinking of the poor as having a mortgage on their second summer home or something like that.
- hutzlibu 4y ago
  ... while being not creative enough, to eat cake, when out of bread.
ajmurmann 4y ago
That can also be true if you have sufficient loans. It's really a balance between how long your comp takes to catch up with inflation and loans vs cash. That said, I think better off people generally might have leveraged their assets even more, getting the double whammy of the mortgage becoming cheaper while the underlying asset goes up in value. Credit card debt also becomes less meaningful though... It all depends (just like in software engineering).
rajin444 4y ago
Do those loans have interest on them? Many major religions banned usury because it’s primarily a way for the haves to keep from the have nots. The alternative where the rich are sitting on piles of money because they can’t profit off loaning would quickly make apparent how they’re leaching off the labor of the people.
kzrdude 4y ago
I think inflation can be a force that equalizes between high and low wealth groups, but that's only if it includes wage inflation. Inflating wages makes wages relatively more important than existing assets.
- cmurf 4y ago
  100% And a large part of today's work force is simply not familiar with fighting for wage increases. They're used to getting meager increases that don't keep up with inflation. Workers have been getting screwed for decades, the slowly boiled frog. It's not worth the fight so they have in effect gotten pay decreases, in aggregate, over 30+ years.
mitthrowaway2 4y ago
Of course the poor are getting payday loans at interest rates of up to 664%[1], or credit card debt at 20%, both of which make inflation irrelevant, while the super-rich are taking out loans backed by their stock and real estate[2] at interest rates below inflation. [1] https://www.cnbc.com/2021/02/16/map-shows-typical-payday-loan-rate-in-each-state.html https://www.cnbc.com/2021/02/16/map-shows-typical-payday-loa... [2] https://www.forbes.com/sites/johnhyatt/2021/11/11/how-americas-richest-people-larry-ellison-elon-musk-can-access-billions-without-selling-their-stock/?sh=1c1a5d8023d4 https://www.forbes.com/sites/johnhyatt/2021/11/11/how-americ...
misja111 4y ago
That assumes that their salaries keep track with inflation and that the interest on their loans doesn't.

Tell that to the economists, who predominantly say that inflation helps the poor, supposedly because they have loans.

by lifty 4y ago

Tell that to the economists, who predominantly say that inflation helps the poor, supposedly because they have loans.

rm_-rf_slash 4y ago

Less helpful for holders of credit card debt as their costs increase alongside their APR…

sidewndr46 4y ago

For some reason when I hear people saying this I just picture them as thinking of the poor as having a mortgage on their second summer home or something like that.

hutzlibu 4y ago
... while being not creative enough, to eat cake, when out of bread.

ajmurmann 4y ago

That can also be true if you have sufficient loans. It's really a balance between how long your comp takes to catch up with inflation and loans vs cash. That said, I think better off people generally might have leveraged their assets even more, getting the double whammy of the mortgage becoming cheaper while the underlying asset goes up in value. Credit card debt also becomes less meaningful though... It all depends (just like in software engineering).

rajin444 4y ago

Do those loans have interest on them? Many major religions banned usury because it’s primarily a way for the haves to keep from the have nots. The alternative where the rich are sitting on piles of money because they can’t profit off loaning would quickly make apparent how they’re leaching off the labor of the people.

kzrdude 4y ago

I think inflation can be a force that equalizes between high and low wealth groups, but that's only if it includes wage inflation. Inflating wages makes wages relatively more important than existing assets.

cmurf 4y ago
100% And a large part of today's work force is simply not familiar with fighting for wage increases. They're used to getting meager increases that don't keep up with inflation. Workers have been getting screwed for decades, the slowly boiled frog. It's not worth the fight so they have in effect gotten pay decreases, in aggregate, over 30+ years.

mitthrowaway2 4y ago

Of course the poor are getting payday loans at interest rates of up to 664%[1], or credit card debt at 20%, both of which make inflation irrelevant, while the super-rich are taking out loans backed by their stock and real estate[2] at interest rates below inflation. [1] https://www.cnbc.com/2021/02/16/map-shows-typical-payday-loan-rate-in-each-state.html https://www.cnbc.com/2021/02/16/map-shows-typical-payday-loa... [2] https://www.forbes.com/sites/johnhyatt/2021/11/11/how-americas-richest-people-larry-ellison-elon-musk-can-access-billions-without-selling-their-stock/?sh=1c1a5d8023d4 https://www.forbes.com/sites/johnhyatt/2021/11/11/how-americ...

misja111 4y ago

That assumes that their salaries keep track with inflation and that the interest on their loans doesn't.