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Comment by AngrySkillzz | Hacker News Reader

> It decreases the value of the money use to pay for them

That is meaningless, though. Imagine last year you bought some asset, that someone else did not, and it appreciated 2% with the price level. You are not any better off. I see you are implying that the other person "couldn't afford" to invest and kept their money in cash instead, to argue that the other person is worse off. That is also wrong - the issue here is holding cash, not the wealth disparity. Don't hold cash if you are worried about inflation. Mutual funds have low minimums, and you can buy fractional ETF shares at this point. You have no argument here.

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> Imagine last year you bought some asset, that someone else did not, and it appreciated 2% with the price level. You are not any better off.

I am better off if the nominal value of that asset matters, which it does if I want to sell it or leverage it. And anyone on a dollar denominated income is worse off.

> I see you are implying that the other person "couldn't afford" to invest and kept their money in cash instead, to argue that the other person is worse off.

You misunderstand, they don’t need to “keep their money in cash”. The asset price increased. Thats all. They are paid less in real terms, by design, therefore the asset costs more to them, because of inflation.

> the issue here is holding cash, not the wealth disparity.

This applies to people who are paid in dollars, it does not require them to hold them.

> Don't hold cash if you are worried about inflation.

Obviously the wealthy are in much better position to take this advice than the middle class, the working class, and the poor. Therefore inflation benefits the wealthy disproportionately.

> Obviously the wealthy are in much better position to take this advice than the middle class, the working class, and the poor. Therefore inflation benefits the wealthy disproportionately.

If the poor don't have cash, and their wages keep pace with inflation (they do) then how are they harmed by inflation?

> If the poor don't have cash, and their wages keep pace with inflation

Their wages don't keep pace with the inflation of assets, so they are continually unable to save or invest their way out of poverty.

> (they do)

Consumer goods and assets don't appreciate at the same rate.

> then how are they harmed by inflation?

for the umpteenth time, they are paid in depreciating units while the real value of assets appreciates in nominal units; creating a problem where in order to save they must invest, and they continually have less real income to invest, because the paychecks are getting smaller (in real terms) and the assets are getting pricier (in nominal terms).

> Their wages don't keep pace with the inflation of assets, so they are continually unable to save or invest their way out of poverty.

Yes they do. [1] Inflation of assets is ROI because its measured in terms of increased welfare relative to CPI. If CPI doesn't go up that's ROI. If CPI goes up its inflation. It doesn't matter when they enter an asset class, what matters is what happens after they enter an asset class.

[1] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...

> Their wages don't keep pace with the inflation of assets, so they are continually unable to save or invest their way out of poverty.

They're poor, they don't have cash. Their assets have their own ROI separate from the benchmark rate.

> for the umpteenth time, they are paid in depreciating units while the real value of assets appreciates in nominal units; creating a problem where in order to save they must invest, and they continually have less real income to invest, because the paychecks are getting smaller (in real terms) and the assets are getting pricier (in nominal terms).

The depreciation only matters from the time they receive their paycheck to the time they invest in productive assets or pay for necessities. Only for the time they're holding literal dollars. If it takes a full year they retain a full 98% of the value. It doesn't matter. You are wrong.

Their paychecks are not getting smaller because wages have kept pace with inflation. [1]

[1] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...

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