Re:The fraying of the U.S. global currency reserve system
by HexagonalKitten on Monday December 14, 2020 @05:48AM
(#25415566)
It sounds like you're saying that to avoid drowning you merely need to swim upstream carrying all your workers. Anyways, by rich I mean the 3%, not the 0.001%. Those who are very comfortable, but who aren't captains of industry. Professionals vs business people.
Can't they (and this is an honest question) do well by locking their income into things that will get more expensive, when measured in currency? Sure their purchasing power will fall, $ for $ with everyone else's, but by selling that real property when needed they'll have more of those $s than people who rode the currency into the ground. Right?
It doesn't work that way. If you want to protect yourself from inflation you have to deploy that capital productively or alternatively be close to the source of the inflation (the central bank). If you are actually doing productive work then workers will see their incomes grow and if workers are underpaid relative to assets then wage growth will continue until both assets and incomes are roughly on par. After that assets will keep up with inflation. The benefits to workers massively outweigh the benefits to asset holders.
When you consider that the central bank is just blindly handing out money to public companies it's basically the opposite. It's actually perverting and distorting the economy because the money isn't going where it is truly needed. If you are rich this is what you want. You want to have lots of money and a workforce that works for peanuts to make your relative wealth even bigger.