this post was submitted on 15 Apr 2024
610 points (98.1% liked)
Political Memes
5502 readers
2033 users here now
Welcome to politcal memes!
These are our rules:
Be civil
Jokes are okay, but don’t intentionally harass or disturb any member of our community. Sexism, racism and bigotry are not allowed. Good faith argumentation only. No posts discouraging people to vote or shaming people for voting.
No misinformation
Don’t post any intentional misinformation. When asked by mods, provide sources for any claims you make.
Posts should be memes
Random pictures do not qualify as memes. Relevance to politics is required.
No bots, spam or self-promotion
Follow instance rules, ask for your bot to be allowed on this community.
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
The actual thing that determines whether someone gains or loses from inflation is: are they a net debtor or lender?
Donald Trump has "money" but may actually benefit from from inflation if he's so highly leveraged that his net worth is negative. A relatively poor retired couple with no debt may be worse off, because they borrow no money and pay for everything with cash.
You're describing who benefits from changes in the rate of inflation. Someone with a lot of credit card debt is worse off from high inflation because the rate of inflation was already priced into the rate they were forced to accept.
So let's say we've got 25% inflation. The only loans you'll be offered will be at >25%. An increase once you've already gotten the loan helps reduce its real value, but that initial 25% is coming out of your paycheck.
This is because the lender can just invest in anything else, while you need dollars now - the burden falls on the less elastic side of the trade.
Yup, and also those furthest away from the source of the cash flow when new coins are minted (and the equivalent generation of money in fractional banking loans) also tend to suffer more from inflation while those closest often benefit. It's like being upstream vs downstream of a popular river as a fisherman.