Re:Can We Survive the Next Financial Crisis?
by rabidrat on Monday September 10, 2018 @03:40PM
(#17954511)
It's only "less" if your wages also inflate. But your food and housing prices increase on the leading edge of inflation, and wages lag. And often they never catch up.
Re:Can We Survive the Next Financial Crisis?
by chimeracoder on Monday September 10, 2018 @05:02PM
(#17955159)
> It's only "less" if your wages also inflate. But your food and housing prices increase on the leading edge of inflation, and wages lag. And often they never catch up.
Except that's not true. If you're a debtor, the effects of inflation decreasing your debt in real dollars is orders of magnitude more consequential than the increase in your expenses, and that's even assuming your wages don't increase (which is generally not true either).
Re:Can We Survive the Next Financial Crisis?
by betterunix2 on Monday September 10, 2018 @10:29PM
(#17956770)
Inflation is typically priced into loans in the form of higher interest rates; this is why bond prices fall (i.e. yields rise) when the inflation rate increases (or more precisely, when people believe inflation will be higher in the future). Also priced in is the uncertainty about future inflation, which is one reason why central banks work to maintain a stable rate of inflation.
What I am talking about here is debt. Owe money on your house? Inflation makes you owe less. Lend money to someone buying a house? Inflation means you get paid back less.