| inb4: "inflation helps people in debt and the poor are in debt" - the most poor in society don't have banking and can't be in debt. They're usually also VERY price sensitive. - typically the poor who have weak access to financial products are participating in e.g. payday lending, which has very high "APR"s and this debt is not intended to be amortized on "inflationary" timescales (you're supposed to pay back at the end of the month). Above them, much debt is revolving debt at high rates (double-digit APR) and those rates are still both intended for money to be kept at for short periods and not helped by inflation. Just about the only "class" of "poor" folks who are helped by inflation are those that own houses that were purchased by a mortgage, and we are clearly seeing that homeownership is being pushed further and further upmarket. I guess there are some "poor" people on some sort of banking small business loan, but my gut feeling is that is sort of "princess and the frog" thing is today a very quaint notion, and not actually that common anymore. The rich, also greatly benefit from easy money and lending with low interest rates. Not directly, but, because they are able to maximize their return on capital through financial instruments like shorts, Forex, etc, whose mechanisms require "lending" in some form or another. These instruments would be more expensive in a regime with less QE. |
Inflation helps with your debt when 1) there is asset backing the debt, in which case it is really leverage that you are getting or 2) if the debt is unsecured, the income servicing the debt would need to be subject to the inflation to reduce the burdeon.
Inflation has occured in assets but not so much in incomes.