How Inflation Confiscates Wealth

[Lovebears65]

How Inflation Steals Wealth - Hidden Tax | University of Common Sense

 

[bitterlyclingin]

Remember the movie "The Graduate"? (With this crew, probably less than 4 to 5 per cent do) In the graduation party scene when the family friend in the person of Mrs Robinsons' husband walks over to the very young Dustin Hoffman and tells him "Plastics, son! Plastics!"
Well, based on historical precedent, and in a similar conversational vein today, its "Wheelbarrows, son! Wheelbarrows!"

 

[Dragon]

Inflation doesn't confiscate wealth, it transfers it from lenders to borrowers, which is, of course, the real reason why it's disliked in some quarters.

And people who think we're heading for Weimar Germany inflation can't do math.

 

[eflatminor]

Inflation doesn't confiscate wealth...

No but false inflation does. When markets would have otherwise produced no inflation, or even deflation, forcing it via central price controls (aka a central bank) is most certainly a confiscation of wealth from those that are not borrowers but are simply trying to pay the bills and survive. Inflation is the most regressive tax of them all.

 

[Dragon]

No but false inflation does. When markets would have otherwise produced no inflation

Markets never produce inflation. Inflation is a monetary phenomenon and consists of a growth of the money supply exceeding the growth in goods and services on the market.

Markets never produce deflation, either. Deflation is also a monetary phenomenon and consists of a growth of the money supply that is less than the growth in goods and services on the market.

Markets are, in fact, completely irrelevant to inflation and deflation both, and the fact that you raised the subject as if it were pertinent tells me you don't understand these monetary phenomena very well at all.

 

[eflatminor]

Inflation is a monetary phenomenon and consists of a growth of the money supply exceeding the growth in goods and services on the market.

And when the growth of the money supply is determined by central planners in an effort to enact price controls (in this case, the price of money) and that increase in the money supply far exceeds the upward price pressure that would have otherwise been the case under free market demand, you get false inflation...a literal stealing of wealth from consumers who would not have otherwise had to pay the higher prices caused by the printing of fiat money.

It's great you can look up economic definitions but understanding the impact of central price controls requires a more in depth look at the situation. Keep studying, you'll get there.

 

[Decepticon]

I find it hilarious that CONZ feel qualified to discuss economics, given the record their agenda has had on the American one.

 

[TakeAStepBack]

Yes, the 800 billion dollar bail out was a really sound move also. Neither side of the aisle today cares about economics. This is a race to the bottom.

 

[eflatminor]

I find it hilarious that CONZ feel qualified to discuss economics, given the record their agenda has had on the American one.

Of course, it's not conservatives nor progressives that are by default qualified to discuss economics, but those of us that have a lifetime of study and advanced degrees on the subject are indeed qualified. Are you?

On the other hand, Libertarians have ALWAYS stood against central price controls. Have you?

 

[Oldstyle]

I find it hilarious that CONZ feel qualified to discuss economics, given the record their agenda has had on the American one.

You know what's REALLY hilarious, Decepticon? That any progressive would have the stones to come on here and lecture conservatives on economics given the effect that their agenda has had on our economy.

Larry Summers and Christina Romer didn't run back to the safety of their tenured positions in academia because their progressive economic agenda WORKED...they jumped ship because their policies were such abject failures.

The truth is your progressive agenda has had this country mired in one of the longest economic downturns in the country's history. It's been so bad...for so long that we've come to look at 8% unemployment and $3.80 gasoline as a good thing. How freakin' sad is that!

 

[konradv]

How Inflation Steals Wealth - Hidden Tax | University of Common Sense

It does, but at today's rates ~3%, it's not a problem. We had a problem thirty years ago, but even that didn't approach Weimar proportions.

 

[Paulie]

Inflation doesn't confiscate wealth, it transfers it from lenders to borrowers, which is, of course, the real reason why it's disliked in some quarters.

And people who think we're heading for Weimar Germany inflation can't do math.

Inflation absolutely does confiscate wealth. Transferring from lenders to borrowers is only one of the many symptoms. You don't have to have lent a single dollar to feel the negative effects of inflation. Those living on fixed incomes suffer greatly as their purchasing power goes down and their income stays flat. Those who save and haven't placed a portion of their cash savings into inflation protected assets also suffer as the purchasing power of their savings decreases.

 

[TakeAStepBack]

Adam Smith's invisible hand will reach out and touch...well, everyone.

 

[eflatminor]

How Inflation Steals Wealth - Hidden Tax | University of Common Sense

It does, but at today's rates ~3%, it's not a problem. We had a problem thirty years ago, but even that didn't approach Weimar proportions.

Thirty years ago we didn't have anywhere near the debt we have today, which absolutely impacts inflation.

Two points on today's inflation: 1) Add in fuel and food, then recalculate. It's worse than you think.; and 2) Societies that experienced hyperinflation saw the hammer fall only after massive currency devaluation and debt. The shit hits the fan relatively quickly. In the Weimar Republic, inflation had leveled in 1920-21. The price index stabled and import prices actually fell...but the authorities kept increasing debt and printing money. By 1922, prices rose 700% and only increased from there. It took less than a year! True, we have not experienced the Weimar's economic problems yet but to to suggest there's nothing to worry about ignores history...and we know what that gets you.

 

[Paulie]

It's no wonder so many people think inflation is good in this country. No one fucking saves anymore.

 

[Truthmatters]

You know what else eats up wealth.

causing a boom and bust in the housing market.

it eats up the main wealth of the middle class and serves it up on a silver platter to those who have big money.

The republican partys failed ideas have done this twice in one life time already.

The American people cant afford your failed ideas anymore

 

[konradv]

Adam Smith's invisible hand will reach out and touch...well, everyone.

You'd think so, but as long as corporate interests can effect legislation with campaign contributions, that's a pipe dream. The hand may still be unseen, but it's hardly unbiased.

 

[Truthmatters]

List of recessions in the United States - Wikipedia, the free encyclopedia


Take some time studying this list.

look at how long they lasted and how often they occured.

You will see a pattern of constant boom and bust.

In that enviroment no middle class can build any real gains.


THAT IS WHY GLASS STEAGAL WAS IMPLIMENTED!


now look at the time of Glass Steagal?


You will see how and why this country built a middle class.

Then what happened a few short years after the republican party finnaly was able to kill GS?


without the proper regulations on the lending industry you have a constant cycle of Boom and bust in which NO middle class can build.


I dont want that country and every middle class person doesnt either

 

[eflatminor]

You know what else eats up wealth.

causing a boom and bust in the housing market.

it eats up the main wealth of the middle class and serves it up on a silver platter to those who have big money.

The republican partys failed ideas have done this twice in one life time already.

The American people cant afford your failed ideas anymore

The Federal Reserve, Freddie, Fannie, the CRA...the ideas that cause boom and bust cycles...these are all solely attributable the Republican party? I did not know that.

 

[Sallow]

Inflation doesn't confiscate wealth...

No but false inflation does. When markets would have otherwise produced no inflation, or even deflation, forcing it via central price controls (aka a central bank) is most certainly a confiscation of wealth from those that are not borrowers but are simply trying to pay the bills and survive. Inflation is the most regressive tax of them all.

What inflationary moves has the fed made recently?