Low unemployment doesn't cause inflation, money supply vs supply of goods and services causes inflation. Inflation doesn't necessarily hurt the wealthy, especially asset inflation. The wealthy don't generally hold a ton of currency which is most vulnerable to inflation.

Is it good for low income earners to have their food and shelter prices go up due to inflation?

Inflation is considered bad because it affects everyone, though the poorer you are the more it affects you.

Job losses affect those who lose their jobs and indirectly the economy due to less spending. Inflation affects everyone and run away inflation is one of the worst thing a country can experience.

If the alternative is mass unemployment I would rather pay 10% more for eggs

Job losses affect the entire economy: the rich don't care since they do not rely employment and wages.

In contrast the wealthy are hit enormously by inflation as they start losing in real terms.

The fed prioritizing inflation over unemployment is a massive hit to the working classes. Doesn't matter if eggs only increased by 2% if you lost your home because there are no more jobs.

> In contrast the wealthy are hit enormously by inflation as they start losing in real terms.

Umm, the poor are hit far harder by inflation than the rich. And it hits everyone in a way unemployment does not, that's why its far more important to fight inflation.

Ask your self this question. If inflation keeps going and interest rates go up to 10%. Who will buy the houses that come available on the market that people can no longer afford?

The rich or the poor?

And who will be the main sellers of those homes?

The rich or the poor?

https://www.brookings.edu/blog/future-development/2022/03/18...

https://www.deccanherald.com/opinion/comment/does-inflation-...

https://goldcountrymedia.com/news/135064/how-inflation-makes....

The key is that wages also rise (not proportionately) in step with inflation but investment returns don't.

It matters very little if eggs go up by 10% each year if wages go up by 10% each year.

Of course what we have is stagflation: wage growth is not keeping up with inflation. Even then, raising interest rates to cause a recession is a really awful way to hack down a metric. Again: lose a job or lose 3% in real income a year?

In contrast the billionaire losing 10% a year in real terms looks at inflation as a catastrophic outcome and would gladly sacrifice everyone else's well being to keep his numbers up.

Best case scenario we end up in late 2008 with 10% unemployment but with a 10% rate. Place your bets on which drug problem will destroy the working class: opioids again?

The mortgage carrying middle class is best positioned to take advantage of inflation, as they are heavily in debt.

Just to note the rich almost never suffer in real terms, like food or housing. They have enough cash on hand to survive any recession or depression even if they lose their businees.

Also bankruptcy laws if someone is going to mention black friday

Musk losing 99% of his wealth would still be a quite well off person, someone at the poverty line losing 1% could be in for a really hard time.

I disagree, inflation is a good thing for wealthy, asset owning people - wouldn't you liked to have owned 15 or 20 homes for the past 5 years?

Inflation is pretty bad for those in poverty too though…

The unemployment rate was at multi decade lows in 2019 but we did not have high inflation. We also had very low unemployment in the 90s and high labor participation rates and had relatively low 2-3% inflation.

We only saw high inflation after a year of worldwide Covid insanity, driven by cheap and abundant liquidity coupled with peak globalism (that is now in decline on an absolute basis, exacerbated by the Russia sanctions) coupled with global supply chain & labor shortages (some of which is generational demographics catching up to us)

This generalization is incorrect. With high inflation hard assets and commodities appreciate. Payroll goes down relative to price of goods (revenue) so many sectors benefit. And it's a fire-sale for people with savings waiting for a big dip.

Source, I lived through high/hyper inflation and was educated on this topic by rich people there.

It's good for rich people if the price of goods increaes greater than wages do. Rich people own more assets