Why inflation is not a threat

Re:Why inflation is not a threat by iso1210 on Sunday March 14, 2021 @10:58AM (#26455938)

The poorest have a negative net worth, so inflation reduces their debt.

The next lot have some wealth in property and pensions. Property especially benefits from inflation as the remaining mortgage reduces as a %age

Now sue, if inflation is high and wages don't increase with inflation that does effect the poorest, but the poorest are screwed anyway.

Median savings account levels based on earnings:

    Bottom 20% of earners: $600
    20th to 39.9th percentile: $1,700
    40th to 59.9th percentile: $3,800
    60th to 79.9th percentile: $8,200
    80th to 89.9th percentile: $18,700
    Top 10% of earners: $62,000

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Re:Why inflation is not a threat by ptero on Sunday March 14, 2021 @11:26AM (#26456156)

> The poorest have a negative net worth, so inflation reduces their debt

Yes, and it helps those who got into debt some time in the past, and without this debt have a positive cash flow today; for example a graduate making good salary but saddled with old student loans.

But I think (although not 100% sure) most poorer people in debt do not have a positive cash flow even when not counting debt payment. They are getting deeper into debt because they spend more than they get. And inflation will probably push those people deeper into the hole: they are on bare essentials (cannot cut those; and they are getting more expensive), and their jobs are more likely to be cut.

Richer folks by comparison have many options to hedge against inflation, from property sprinkled around the world to commodities, precious metals in cold storage, inflation-resistant stocks, etc. My 2c.

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Re:Why inflation is not a threat by vladimirralev on Sunday March 14, 2021 @11:38AM (#26456249)

The poor can only take high premium inflation adjusted loans. Inflation doesn't reduce the burden. The poor would generally make minimum wage ($7.25 in the US for about 15-20 years now). Same people who say there is no inflation call this "a starvation wage" never making the link between printing money and the wages pushing poor people into starvation. The poor spend most of their money on housing, food, medical and energy. All of which are massively up (6% up YoY average last week). Food and energy of course are ignored in headline inflation as a rule.

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Re:Why inflation is not a threat by henvic on Sunday March 14, 2021 @11:56AM (#26456364)

Only if you consider the poorest living in a mortgaged house that costs $800,000 with $720,000 left to pay while making $120,000 a year.

This is not valid for the poor people making $15,000 a year with $600 in their bank account. These people are losing a lot of wealth.

Debt is not that easily accessed by everyone! And when it comes at the cost of inflation as it often (or even almost always!) does, it's even worse.

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Re:Why inflation is not a threat by iso1210 on Sunday March 14, 2021 @03:18PM (#26457999)

They aren't losing a lot of wealth, they don't have it.

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Re:Why inflation is not a threat by henvic on Monday March 15, 2021 @06:48PM (#26470324)

What you say doesn't make any sense. For someone poor with $50 of savings, if they lose $5 it might not seem much to you, but it might be to them. It actually is a lot of money if you're considering someone really poor, especially in poorer countries.

I assume you're probably in the US and think that making money is as easy as it is for most people there everywhere. No, it is not easy for everyone, and not everyone lives in the US.

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