It’s also one of the most important.
In this thread, we will cut through the lies about inflation & empower you to call ‘bluff’ when it's weaponized against your best interests. 1/23
Inflation can be caused by many things such as expansionary fiscal & monetary policies, disruptions in particular markets (i.e., war/embargoes etc.) or changes in bargaining power (i.e., mergers, monopolization etc). 2/23
We can’t buy anything unless we sell something first.
There are exceptions, but this is true for the vast majority. 4/23
Your income goes up, while your cost of living stays flat. 5/23
Your income goes up at a faster rate than the items you buy. 6/23
Your income goes up along with our cost of living. 7/23
Instead, most of us sell our labor. But the same logic still holds. If our wages (price of labor) goes up faster or at a higher rate than the prices of the goods & services we buy, we are better off! 8/23
Inflation helps debtors & hurts lenders.
Let’s say you have $100,000 in debt at 7% interest. If inflation is higher than your interest rate, you will be paying off the loan in money that is less valuable than when you first got the loan. 10/23
That’s good for debtors & bad for lenders. 11/23
Is there ever a case when inflation is always bad? 12/23
Hyperinflation is pretty much always bad. 13/23
First, inflation is often a major cause of wealth redistribution.
Monetary & fiscal policies of the last 50 years have basically been engineered for the benefit of the 1% at the expense of the many. 14/23
There's nothing normal about it. It's caused by specific policies that benefit the few at the expense of the many. 15/23
Inflation is often used as an excuse to put the breaks on policies that actually help the vast majority of the population. 16/23