It's so hard to make people to think in the terms of real wages, that politician saying his aloud would be a political suicide.
All you get is unintelligent comments like:
- fed conspiracy against working man, and
- money printing brrr.
All you get is unintelligent comments like:
- fed conspiracy against working man, and
- money printing brrr.
- High inflation destroys savings. If someone is saving to buy a house or saving for their children's schooling, inflation destroys it if it's not invested in something.
- High inflation is rarely if ever matched by wages going up. Just look at the minimum wage, it hasn't matched inflation at all.
- Inflation penalizes anyone who isn't invested in things that hold their value versus the value of the money. Namely if you're rich enough to invest in stocks and bonds your money holds better value than if you live day to day or keep your money in a savings account. It's a form of regressive taxation.
- Inflation isn't bad at all for people who are in the financial system itself, namely the people who actually control the inflation rate.
- It frees the government to spend even more wastefully as they can use the inflation to erase the federal debt
This is not true. When the inflation is high, normal savings accounts pay interest rate that protects from inflation. Besides if you are saving a lots of money you should invest it for something. Like government bonds at least.
> High inflation is rarely if ever matched by wages going up.
This is not true. Inflation and real wages are not connected. Why would they? See for example: https://en.wikipedia.org/wiki/Real_wages#/media/File:United_...
What high inflation does in some jobs, it allows employers not to lay off people by not increasing their wages (when their productivity is not increasing).
> Inflation penalizes anyone who isn't invested in things that hold their value versus the value of the money
And this is how it should be. Money should not be good store of value in long term.
And as I said before, savings account interest rates are not zero when inflation gets going. https://www.finder.com/history-of-savings-account-interest-r...
https://www.bankrate.com/banking/cds/historical-cd-interest-...
Interest rates are not in line with inflation, therefore, savers are being eaten alive. Those on fixed income (retirees, disabled) are getting absolutely screwed.
Pray tell which banks are you banking with?
> What high inflation does in some jobs, it allows employers not to lay off people by not increasing their wages
shorter: "Let's screw the labor class over so that their managers don't have to fire themselves."
> Money should not be good store of value in long term.
"it is important to encourage consumption at all cost in the long term"
A TD High Interest bank account has a 0.050% interest rate after $5,000. Before that the interest rate is 0.000%.
Don't worry, as long as you have $25,000 dollars in there, they'll waive the transaction fees every month ($5 per transaction).
I might as well stick it under the mattress and pretend I don't have it at those rates.
Wages follow inflation, of course.
https://www.investopedia.com/terms/w/wage-push-inflation.asp
I can't find a SINGLE savings account over 1%, while inflation is over 5%:
https://www.bankrate.com/banking/savings/rates/
Treasury bonds are barely better -- 10yr < 2% (!)
Other than the last hundred or so years (and a few historical fiat currencies) money has always been a good store of value. Or I should really say ‘specie’ instead of ‘money’.
LOL. If money isn't a good store of value, the market will find something else that is.