Inflation is not the reason poor people spend all their money. They spend al their money because they are paid just enough to exist. There is no capitalist world where we are all rich.

In fact, often capitalists will pay LESS than is required and make up the difference with consumer credit and welfare

I think it's possible to agree with your last three posts and not see how those are in any way an argument that inflation doesn't hurt the poor/middle class.

Your argument is basically that poor people are going to be poor no matter what because of capitalism. And that's fine. There is truth to it. But inflation will still make them even poorer and worse off where it occurs.

I never said inflation doesn’t hurt the poor or middle class. I said that inflation, in certain implementations, hurt the rich more than the poor.

Here is what I said, Dustin

1) hyperinflation is likely always going the cripple the economy. In the case of VZ this is occurring through currency manipulation and other external factors.

2) controlled inflation, when implemented correctly, can be used to help bouy the lower class. The bolivarian governments have certainly been using policies that would cause this type of inflation.

3) inflation is almost always going to hurt the rich, especially when it involves policies that redistribute wealth

aside from the Linearity argument I alluded to earlier,

it seems that inflation matters most to those whose material wealth is represented in hard currency, ie teh poorz

I think the argument is/should be more that under capitalism there will always be poor people, not that people who are poor will always remain that way.

Yes. I didn't mean to imply that was the case.

yeah this

"material wealth"

"poor people"

pick one

I feel like this concept is self evident, but I will provide an example to illustrate it further.

If you and I each have a million dollars. Mine is in hard cash, yours is in some type of investment that is earning something like 5%. If inflation is 2%, it matters equally to both of us. Me, with my hard cash, lose 2% of the value of my money every year. You with your investment, increase your wealth by 3% every year. Inflation means for both of us that we will have 2% less wealth than we would have otherwise. 2% of a million dollars is $20,000. So we are both losing $20,000 a year thanks to inflation. The fact that my wealth is in cash and yours is in some investment makes no difference as far as inflation is concerned.

Where it does matter is if instead you have a million dollars and I have zero dollars. In that case you still lose your $20,000 a year and I lose nothing. It doesn't matter how many more times you pretend that poor people have wealth to suit your argument, the facts remain the same that the more money you have the more inflation affects you.

Now the argument you will make is that if you have a million dollars and I have a hundred, you will lose $20,000 and I will lost $2 but that $2 means way more to me than it does to you. But again, that assumes I posses any kind of wealth--i.e. money that I do not need to spend. For poor people, this is not a reality. You spend what you have to stay alive. Inflation matters, but not as much as it does for someone who actually has wealth.

None of this applies to hyperinflation where, like I said, the entire economy can be destroyed.

You don't understand how capitalism works. When there is inflation, interest rates are higher. The interest rate in Argentina right now is (or was very recently, at least) 60%. If interest rates were lower than inflation, people wouldn't loan money. Instead they'd buy stocks or property or something else. (And since there are always people who want to borrow money, interest rates would rise to the point where people are willing to lend.)

I’m trying to imagine how it would go if Nancy Pelosi just claimed to be president, swore herself in, then other countries started recognizing her as president

https://fivethirtyeight.com/features...ic-nomination/

538 has a positive article on Gabbard. They called her a "moderate anti-establishment". Which I'm not sure what that is. Her best approach would be to repeat what Trump did and get a lot of attention drawn to herself by saying how horrible the media is and doing things like voting against that NATO bill. But she didn't do that.

something is certainly self-evident

The dispute is not whether "inflation" itself operates differently among the scenarios, it's whether the net outcome is more or less impactful.

Me gaining 3% vs you losing 2% is a clear outcome showing that inflation is worse for those who can't afford to invest - ie, teh poorz (QED).

1. Poor people get money as wages in hard currency - that money is "Wealth", even if it doesn't make them wealthy.

2. Yes, the affect of inflation, in absolute terms, is greater when one has more wealth, just as the tax paid at a flat/linear rate. Do you think that a flat tax is harder on the wealthy than on the poor?

the underlined is not a definition I expect most people to intend

inflation matters more if it means you can't eat off your sticky wage than if you can't buy another boat, regardless of how much more expensive boats are than food

afaiu, lower interest rates encourage borrowing; lending is assumed (structurally incentived, perhaps? idk)

borrow when rates are low, invest when rates are high


Perhaps I don't understand capitalism, but isn't inflation a function of interest-rate and not the reverse? When interest is low, people borrow more, increasing the money supply, and thereby increasing inflation. When the interest rate goes up, people invest more, decreasing the money supply, thereby curbing inflation.


I would make (read: attempt) a time-value calculation before making an investment - I don't want my investment to be outpaced by inflation... But if I'm only investing when interest rates are high, isn't it likely that inflation will ipso facto be lower than otherwise?

yup

and I am claiming villa cred for calling out such implications of online social networking years before Trump

I was speaking in the context of hyperinflation caused by the government printing money.

You talk about interest rates being low, but low relative to what? There's clearly a point at which people wouldn't be willing to lend. For instance, why would I loan you money to buy a house if the money you repay me ends up being less than the value of the house? I could instead just buy the house myself and then sell it when I need liquidity. I'm not sure what you're referring to when you talk about lending being assumed, but I'd figure that's rooted in the assumption that the market is going to establish a rate that works for both parties. With high inflation you'll be willing to pay me higher interest rates to buy your house because you know that your wages will be increasing as you repay the loan and your house will be increasing in value.

You are right it is not a good definition but yours isn’t either. What we really should be talking about is “capital” which is money which only exists to make more money compared to money that is spent on final goods and services

Yeah the important distinction is whether the money is capital or not. People that work for a wage are of course not paid in capital

In a central banking system with fiat currency, lowering interest rates is equivalent to printing money.

You lend me the money because i pay you fees and interest, and if I default you get the house, too.

You don't buy the house because you don't want to bear the upkeep costs, like property taxes, maintenance, etc.

Way beyond my ken here, but I assume there are regulations either requiring or incentiving the issuance of loans generally. There's also the market and f'ed up influences like bailouts and shorts.

The spice must flow.

I don't want to borrow worthless money. Higher interest rates, by design, deter borrowing.