kabab

The Unsustainable Lie of Inflation

Exactly. William Greider argues the same in "Secrets of the Temple: How the Federal Reserve Runs the Country".


On Nov 09 09:26 PM Steve in Greensboro wrote:

> On Nov 09 02:25 PM Michael Clark wrote: "...Inflation is the rich
> stealing from the poor....Deflation is the poor getting even with
> the rich...."
>
> On Nov 09 04:23 PM ThirtyNineWinks wrote: "You've got it backwards.
> Inflation robs from people with money, and helps people with debt..."
>
>
> ThirtyNineWinks has it right. Mr. Clark has it exactly backwards.
> Speaking generally, the rich are generally creditors and the poor
> are debtors.
>
> Monetary inflation make the dollar-denominated assets and liabilities
> both worth less. The positive net worth of the rich gets smaller
> and the negative net worth of the poor, while still negative gets
> smaller too. Deflation works the opposite way, helping the rich
> and hurting the poor.
>
> Inflation helps the poor by reducing the value of their debt compared
> to their wages. The fact that it also reduces the debt of the biggest
> debtor on the planet, the U.S. government, makes it a certainty that
> there will be inflation, because the U.S. government controls the
> money supply and will guarantee inflation.
>
> But in the end, inflation hurts everybody, because the primary unit
> of account (the USD) becomes corrupted and unreliable, making business
> decision-making, capital accumulation and resulting wage increases
> impossible.