Inflation is also good for those that own assets as their relative value to dollar increases.
Everyone has a mix of:
Debts, money they've loaned to others, amount of assets owned, and amount of dollars owned and wages (recurring income in dollars).
So, inflation is most harmful to wage earners with few assets - and most helpful to non-wage earners with many assets.
Increasing wealth disparity between workers (most people) and those who own the most assets. Those who own large amounts of assets largely don't own dollars - they own real estate, securities, etc..
The bank issue is a strawman - simply a matter of SVB (and others) making bad interest rate bets and losing.
> Inflation is also good for those that own assets as their relative value to dollar increases.
That's not "good", it's just less bad, because as soon as they want to turn those assets liquid they run into the same problem. Their assets are not gaining value, they're just not losing it.
Physical assets generally lose "real" value on their own too, because they degrade or need maintenance. The asset prices might go up but if you sell them to buy other stuff, that other stuff also went up in price (probably higher).
However, high enough inflation does benefit people who borrowed tons of money to hoard more physical assets than they can afford.
"high enough inflation does benefit people who borrowed tons of money to hoard more physical assets than they can afford"
If their salary keeps up with inflation yes. The trouble with relying on RSUs for comp is that when the fed raises rates to fight inflation, it ensures your total comp doesn't keep up with inflation.
> Inflation is also good for those that own assets as their relative value to dollar increases.
I'm not sure what type of assets you're referring to, but I haven't exactly noticed stocks skyrocketing along with inflation. If anything they seem to have dropped in value.
With inflation, the price level increases. This means that firms' input and output prices, and as a consequence, also their profits, will increase. Unless stock prices are in a bubble right now, this should make them rebound in value later on in a way that cash won’t.
Everyone has a mix of: Debts, money they've loaned to others, amount of assets owned, and amount of dollars owned and wages (recurring income in dollars).
So, inflation is most harmful to wage earners with few assets - and most helpful to non-wage earners with many assets.
Increasing wealth disparity between workers (most people) and those who own the most assets. Those who own large amounts of assets largely don't own dollars - they own real estate, securities, etc..
The bank issue is a strawman - simply a matter of SVB (and others) making bad interest rate bets and losing.