Re:Fed raises rates by another 75 bps to fight inflation
by nimish on Wednesday September 21, 2022 @04:55PM
(#32931389)
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?
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?