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> Inflationary environments are actually positive for these people, because it makes it easier to justify ever increasing rents. No. Deflationary is better, be

> Inflationary environments are actually positive for these people, because it makes it easier to justify ever increasing rents. No. Deflationary is better, because they keep the same price but get more and more wealth anyway. Its the lack of competition that's the problem in any case. If someone is not contributing well or giving a good deal, shop somewhere else. If you're unable to shop somewhere else, then its a known flaw in capitalism (called Monopolies). You only have a good capitalistic system if competition can be assured.

ffsm8 2y ago
Deflation is good for people that have most of their net worth in cash and bad for people that ... don't Think a little about it: if the money gains in value it would mean their property loses value, because it's price would go down (as the money will be worth more). Rent seekers mostly have their net worth in assets such as properties and shares, and for those people, inflation is good - because these effectively become more valuable - because they're suddenly worth it's purchasing price + inflation. (That's the definition of inflation, you need more cash to purchase the same product vs deflation where you can buy the same product for less cash). If every wage etc increased at the same rate as inflation, the difference would probably be academic... But it's not, most employees didn't get a total 30% wage increase within the last 4 years after all, which means that the total purchasing power of (for example) the American people has decreased. This will ultimately reduce their ability to spend money on products, which means less trades that happen... And more accumulation of wealth, because the people that actually captured that value invested it in things that will effectively become rent seeking, ultimately furthering the spiral
- dragontamer 2y ago
  > Deflation is good for people that have most of their net worth in cash and bad for people that ... don't I don't think the poor or middle class have much net worth in anything. In particular, my mental model is that the middle class will get wrecked by their student loans or car loans if you purposefully deflated the dollar. The rich have enough money to prepare for all circumstances, be it inflation or deflation. It's a loss if you're trying to prevent them from gaining more money by simple means like this. In times of deflation they will hoard cash (even international trades like the the carry trade: taking advantage of the difference of inflation between national currencies and economies). ------ In any case: increasing the cost of everyone's debt burdens is almost obviously the wrong move.
  - ffsm8 2y ago
    You're right, they don't have a lot of savings - but doesn't that make it even worse for them, because that means their income is basically all their wealth. And this is objectively even more impacted by inflation as I said before, because it keeps getting worse with every year, because most workers do not get raises equivalent to inflation. And I think you'd agree too that assets become more valuable by inflation (because that's kinda the definition of the term), and that consequently means that if your net worth is mostly assets, as every rent seekers portfolio is - you really do like inflation. Even if you're right that the people heavily in debt also gain by having it devalued via inflation: I don't think it'd have enough impact to offset their depreciated wage and the additional cost of living though - but that's just my personal expectation

ffsm8 2y ago

Deflation is good for people that have most of their net worth in cash and bad for people that ... don't Think a little about it: if the money gains in value it would mean their property loses value, because it's price would go down (as the money will be worth more). Rent seekers mostly have their net worth in assets such as properties and shares, and for those people, inflation is good - because these effectively become more valuable - because they're suddenly worth it's purchasing price + inflation. (That's the definition of inflation, you need more cash to purchase the same product vs deflation where you can buy the same product for less cash). If every wage etc increased at the same rate as inflation, the difference would probably be academic... But it's not, most employees didn't get a total 30% wage increase within the last 4 years after all, which means that the total purchasing power of (for example) the American people has decreased. This will ultimately reduce their ability to spend money on products, which means less trades that happen... And more accumulation of wealth, because the people that actually captured that value invested it in things that will effectively become rent seeking, ultimately furthering the spiral

dragontamer 2y ago
> Deflation is good for people that have most of their net worth in cash and bad for people that ... don't I don't think the poor or middle class have much net worth in anything. In particular, my mental model is that the middle class will get wrecked by their student loans or car loans if you purposefully deflated the dollar. The rich have enough money to prepare for all circumstances, be it inflation or deflation. It's a loss if you're trying to prevent them from gaining more money by simple means like this. In times of deflation they will hoard cash (even international trades like the the carry trade: taking advantage of the difference of inflation between national currencies and economies). ------ In any case: increasing the cost of everyone's debt burdens is almost obviously the wrong move.
- ffsm8 2y ago
  You're right, they don't have a lot of savings - but doesn't that make it even worse for them, because that means their income is basically all their wealth. And this is objectively even more impacted by inflation as I said before, because it keeps getting worse with every year, because most workers do not get raises equivalent to inflation. And I think you'd agree too that assets become more valuable by inflation (because that's kinda the definition of the term), and that consequently means that if your net worth is mostly assets, as every rent seekers portfolio is - you really do like inflation. Even if you're right that the people heavily in debt also gain by having it devalued via inflation: I don't think it'd have enough impact to offset their depreciated wage and the additional cost of living though - but that's just my personal expectation