📉📈 Inflation and Deflation | A Hidden Tax

Inflation and deflation - definition and consequences of monetary expansion or contraction. Learn Austrian Economics in a fun way!
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Econ Clips is an economic blog. Our objective is teaching economics through easy to watch animated films. We talk about variety of subjects such as economy, finance, money, investing, monetary systems, financial markets, financial institutions, cental banks and so on. With us You can learn how to acquire wealth and make good financial decisions. How to be better at managing your personal finance. How to avoid a Ponzi Scheme and other financial frauds or fall into a credit trap. If You want to know how the economy really works, how to understand and protect yourself from inflation or economic collapse - join us on econclips.com. Learn Austrian Economics in a fun way!

[@vivekshinde3105]

you are speaking truth, our college and academic college books are telling us wrong and false thing which is leading us towards poverty and miserable life. Banks and government will not like this. Your work is really valuable for people.

[@dehogerewaarheid]

These videos are sooo underrated!

[@aegi9931]

watch hidden secrets of money my boi

[@aryaveersingh7339]

"a war destroys 2 pencils," I wish that was all they did lol.

[@demitriusvaughan3356]

yup XD

[@visuallycourses]

Best no fuss description. much better than the school of life's who overdo the animations and make the topic complicated.

[@vmichial]

This is an excellent overview of Austrian inflation. I'll be sharing. Thank you for the upload.

[@EconClips]

Thanks :)

[@davidfrasier7987]

this is very impressive

[@uguishmate9458]

Thanks for the explanation! Watching from Argentina

[@abhinavitsmebellamy]

Thank you, so much for this. Really well explained!!

[@sumirunihon]

It's funny how now in the 20s suddenly everyone understands this but in 2016 when this video was posted that would've been preposterous to say. People think that because times are good that the current policies are also good and don't realize bad policy until it actually gets out of control and by then it's already too late...

[@thecomprehensionhub4612]

The biggest inside joke that all economists know is that the financial system is actually a scam. They have a dark sense of humor

[@darluk2]

Thank you very much for this video. I am Polish and dicovered your site a few days ago. Good luck.

[@EconClips]

W takim razie zapraszamy na polską wersję kanału:) kzbin.info

[@darluk2]

Dziękuję.

[@adhepur]

Precious information. Thank you so much for making this video.

[@lalufadlurrahman3075]

I'm a new fan :). Keep it up :)

[@kvio3321]

This is an exceptional video.

[@RobotsCanDoAnything]

Nice job, excellent discussion.

[@marunio435]

Such a good theme on today. I hope Pinocchio will see that film.

[@CodeSwag]

I know that background music is probably creative commons, but that's Caspian Report music man. Shirvan should be awarded honorary copyright

[@thetrumpnewsnetwork7503]

I can't say I agreed with your final assessment. The best solution is that the currency trades within an acceptable range. Frankly as a retired FOREX trader/broker in both spot and options (futures) your "cure" is unrealistic and a bit childish. Currency trading is a huge industry that benefits not just the banks but the consumers as well. Take your blinders off and look at the bigger picture. Utopia is not a real place and it never will be.

[@musaran2]

As a means of exchange, a currency should first and foremost be STABLE. If I am trading, I don't want the additional hassle of my money itself varying unexpectedly. Of course, as a politic tool, the view is different.

[@d2nd21st]

nice, this video tell you the truth about inflation and deflation.

[@mystwolfe7791]

A video that actually tells the truth.

[@aegi9931]

watch hidden secrets of money my boi

[@mixme8655]

Thank you now i know the difference

[@MrDanielfff777]

How do people get the money last? Or first? What does that mean? Isnt the demand for money always extremely high?

[@skylerjoseph1981]

Trickle down economics? I think? I still don't know how it works

[@MrDanielfff777]

@@skylerjoseph1981 ????

[@ethanpetersen810]

When the government prints out money who do they give it to? Who gets to spend the newly printed money first? That’s what he means.

[@cancelled_user]

There's one more thing... If the value (or purchasing power) of money goes up over time, people may start stockpiling money at home instead of putting them to work in the economy. Inflation slowly erodes your savings which forces you to invest your money, i.e. putting them back into economy. If you buy stocks or put your money into a fixed saving account, your money may be used by someone else for creating something. Later you get them back with interest. Although this involves at least some risk, it seems to be better than putting the money under the mattress (in case of deflation) because you know they will buy more a year later from now.

[@DarkTutoxt]

is good short term but guess what, anything can go up forever this only causes bubbles as people need to buy assets as soon as possible, taking progress from the future to use it now, because the only way to continue is to keep inflating the bubble, in other word stealing money from your children and the children of your children, basic replication of a ponzi scheme, paying early investors with new investors so that those new investors can get paid by the following generation, the same as pensions today, this can only work out if population keep rising exponentially.

[@LTrejo91]

Inflation = big brother taxing you on your taxes when you get your check from work/labor at the end of the week. You then pay more taxes at the end of the year and then your money is worth even less at the end of the year.....

[@RobyHaw]

good video but please use a Desser..those Sss are needling my ear drums *.*

[@rafaelpesconi6362]

deflation whould hit hard the economy because its based on a overconsumtion of product, you dont buy something just because you need it, you buy it because you are convinced that you want it.

[@picasso114]

Great video. A small note, however. At 1:23 that isn’t inflation at all. If the GDP rises at the same rate as the money supply, no inflation. Let’s not confuse ppl

[@todabsolute]

I'm interested in what'll happen if a country removes currency exchange and taxes but much increases the inflation rate. Will it be a boost for investing and business or no?

[@obviouslykaleb7998]

I’m a layman - I’m going off of the videos I’ve seen from this channel, MisesU and others, but from what I understand about your question it seems that it would not be a boon, except for those inside of the rapidly inflating country who have made investments outside of that country. If I take country A for example (yours) against country B (a completely Austrian country, so no taxes and no inflation {I’ve no idea what the Austrian position on currency exchange is}) it seems that as country A’s economy inflates and its dollar value goes down, the only people IN country A who have a stable, if not increasing quality of life would be those with a stable currency, being country B’s. That kinda skirts the question on “currency exchange,” but going more strictly off your question; if it was an otherwise self-contained highly inflationary country I don’t see how it would boost investment except at the very beginning of the policy with those who see no other hope for the future. To better summarize: If I have one dollar and an apple seed costs one dollar, and I know the price of the seed is going to be two dollars tomorrow I’m going to invest while I can afford to do so. Perhaps the investing would go up, but it would be a very short time until you see the effects of the inflation show.

[@sanpedrosilver]

Very well done sir 👌🏼

[@drsjamesserra]

Top video!

[@Sneh_Barvadia12]

Excellent Sir

[@PartimentoFR]

Thanks a lot ! Can you explain why do central banks make inflation and deflation cycles ? What do they have to win ?

[@EconClips]

Lowering interest rates gives short term boost for the economy, and lower government debt service cost. When the inflation shows up, interest rates must go up, to hinder inflation. See more here: kzbin.info/www/bejne/jIrHd2OEbs2grsU

[@acidcube6967]

Firstly! 🌟✨🤛 Great information needs to be understood & you do so in an extremely Artistic manner. I like & respect your simple use of Artistic implementations to make an otherwise difficult subject easily digestible. From experience which mac based animation programmes can you recommend to perform simple animation techniques? P.S Im asking as I’ve got nothing to do with the economics genre 🔙 🌟✨🤛 Cheers, Marlon

[@austinbyrd4164]

Natural market deflation is great. Saving (detering consumption) is encouraged. These funds are then used in productive, usually longer-term, ventures through investments & loans. In direct proportion to how demanded they are & how much consumption is detered.

[@ranjithvenkat4410]

it is very good explanation.

[@captainmoretokin2172]

Everybody: we gotta do what we gotta do then. Start breaking pencils

[@ronpaulrevered]

The description of wealth inequality presented here is the only valid one.

[@matrixman8582]

Not really. It implies that monetary inflation only causes inequality if the newly created money is distributed unequally, and that if the central bank just prints money and hands it to lower income people first that it wouldn't cause it. However inflation causes inequality regardless of who gets the money first. Inflation hurts those with little assets and saving, who tend to be lower income individuals, while helps those who have assets and debt, which tend to be higher income individuals and governments.

[@ronpaulrevered]

@@matrixman8582 If a central bank prints money and hands it to lower income people first it hurts higher income people, because inflation hurts those who receive money last regardless of if they are high or low income earners. The reality is that the wealthy do receive created money first to the less wealthy's disadvantage and this is indeed unfair. This is a valid description of wealth inequality where other description that describe uneven distribution of wealth are theoretically unsound.

[@matrixman8582]

@@ronpaulrevered At first. However the inflation that results from the increased velocity ultimately helps higher income earners

[@ronpaulrevered]

​@@matrixman8582 I don't hold that view. If you're interested in my position feel free to view this article. mises.org/wire/money-velocity-myth

[@prakharsharma3070]

Can u please explain what is inflation tax?

[@joelmedvidovich9421]

Inflation is like a tax because everyone who holds money loses purchasing power. ... In a hyperinflation, the government increases the money supply rapidly, which leads to a high rate of inflation. Thus the government “uses” the “inflation tax”, instead of taxes, to finance its spending.

[@P3trarch]

Try explaining that to the argentine economists.

[@eitanko]

just a comment on deflation, production prices keep low because cheaper labor in Asia, not because of an increase in productivity. This has other repercussions in job creation. Is this correct?

[@logat1847]

jobs in Asia means no jobs here

[@_denzy_6310]

Would inflation decrease if we all started saving money?

[@neurzero]

Yes. Inflation -> reduce in purchasing power -> increase productivity to compensate the low purchasing power -> economy growth Deflation -> increase in purchasing power -> decrease productivity because current cash can afford more -> economic decline Continuous inflation leads to beginning of deflation, and continuous deflation leads to beginning of inflation. If you spend more individually (deflation on yourself), you create inflation on yourself (reducing purchasing power because low cash) -> your financial portfolio is not good If you spend less and start saving individually (inflation on yourself), you create deflation on yourself (increase purchasing power because you have high cash) -> your financial portfolio is good. General talk about inflation/deflation always describe the big picture of total economy, not individual view

[@brukernavn142]

Yes and that is why central Banks try to controll inflation via interest rates.

[@rohitbhatia3564]

Value of money inc. On deflation . But people start hording money . Causing lesser demand therfor slow economy lesser production and again inc in prices

[@derrickmelton5844]

Also known as a deflationary spiral, aka the thing that even Austrian economist Freidrich Hayek understood prolonged the great depression!

[@matrixman8582]

The money itself doesn't have any value. It's what you can buy with it. People will consume more responsibly and banks will raise rates to encourage deposits.

[@sten260]

inflation is good if you are rich already and own a lot of assets, but it's bad if you are just a regular person with a job. You should not fear deflation if you are able to work, there are always going to be people willing to pay money for your work, deflation will just make everything cheaper for you so your wage can buy more things. So regular people will benefit from the market crashes and deflationary cycles, but the rich won't

[@sten260]

@@novinceinhosic3531 how many rich people have cash instead of assets? only the stupid ones

[@gem8080]

Can someone please explain to me which is worse for the national economy: inflation or recession? And why?

[@frederikferguson2571]

we need a little bit of inflation like maybe 2% or so. its only when we reach like maybe 5% or more things slowly starts to get problematic. so my guess is that deflation is worse overall

[@TruthDefender]

Theres something wrong with the sound. Too much high and middle Hz

[@tommygannett3217]

Very intuitive I’m much smarter now

[@Jefleopard]

Currency is not money. “Money shall only be gold and silver.” ~the Constitution of the United States of America.

[@dr.orange1605]

The baseline state of a competitive market without monopolies is deflationary. Human curiosity drives technological innovation, enhancing efficiency. This, combined with consumers constantly seeking "more for less" and entrepreneurs striving to stay competitive, results in deflationary pressures on prices across all sectors. Ultimately, prices should fall to the marginal cost of production. If this premise holds true, I am compelled to question the collective conviction that monetary inflation is a necessary component for a functioning economy. To be more direct, why do we endorse a system where a certain loss in purchasing power, akin to a hidden tax, is deemed essential and undemocratically imposed upon us? Could it be that we find ourselves entangled in a conflicting paradigm? One where the exponential growth of technology, promising efficiency and deflation, clashes with the perceived need for inflation to stave off economic downturns, especially in the face of seemingly unsustainable levels of debt.

[@zachparker1468]

If we remained on a gold standard, wouldn’t a growing population suffer from it after a while?

[@ericencina209]

Two kinds of inflation, inflation is caused by debt finance lending at interest, and inflation is caused by too much cash money. What's happening now is inflation caused by debt, not too much cash because there's a lack of money vis-a-vis in this age of plenty. Debt-free money in times of scarcity of money is not inflationary, but more loans at interest at whatever stages cause inflation.

[@MaciejMerlinMoroz]

There's a lot of misconceptions. Of course the government borrows, but repays with inflation rates + loan interest. That's a big oversimplification. Doesn't empirical evidence say otherwise? In deflation, investment is more risky and less profitable. The same with consumption and debts, which leads to shrinking economy. This means less productivity, lower employment and bankruptcies. Lower employment and lower production means shrinking economy. Seriously, when deflation shows up? During crisis. Big Depression, Japan in 1990-2000's... Please, base this not on hypothesis, but empirical data. Deflation is as much, or even more dangerous than inflation. Please, remember that economy is based on PSYCHOLOGY and SOCIOLOGY much more than on mathematical abstracts. If people get laid off, when investments stop, productivity plummets and employment rates are smaller and smaller, psychology of crowd makes it be more skeptical and afraid.

[@EconClips]

"Of course the government borrows, but repays with inflation rates + loan interest" More about that in our film "Money creation" "Seriously, when deflation shows up? During crisis." This is true for XX century (since the Fed creation). Here you can see that this was not always so. www.in2013dollars.com/1800-dollars-in-1900?amount=100 Also, the deflation is a result of depression, not the cause. And to be more specific, it's a result of previous inflation and credit expansion. More on that in our film "Austrian Business Cycle Theory"

[@matrixman8582]

No in deflation, BAD investments are risky and less profitable. It's funny how you point out how the economy is based on psychology when the deflationary spiral argument is literally a denial of that

[@willy4170]

But what you cited, is technological deflation, which has nothing to do with monetarily deflation. So you could have monetarily inflation and technological deflation at the same time, that is actually what happened.

[@ChitranjanBaghiofficial]

inflation and deflation both are bad both disturb the price signals, money should be treated like a product created in proportion of demand.

[@GamerGod-fp1tj]

If only money was more simple, having a fixed value, and everything else having a fixed cost, and the amount of money in existence scaled by products and population

[@arcadealchemist]

This is why CRYPTO needs to be implemented as a state currency.

[@yanchenkoigor]

Do you really need a state approval to use crypto? Do you need a state currency? Why can't you use crypto without being a state currency?

[@joshuajenkins1937]

@@yanchenkoigor Yes, crypto is already there. No need to wait

[@Bearthedancingman]

Shows how banks, corporations and government is using us as financial slaves to their racket.

[@abgm8019]

Deflation is good for a person in concervative ways, but in macroscale, we know that tech company have to research for new tech, they spent much money from the beginning of research, then after years their product mature, they sell their products for cheap and get less profit.

[@agapheputrasusilo741]

Powell needs to see this video

[@bradherle2519]

You forgot to mention how income tax brackets don’t keep up with inflation, so not only do you have less buying power, but more of your money goes to taxes.

[@ferrarkumar1103]

Hello, fellow ancaps

[@yordansanchez1990]

Control deflation will help the working class

[@InTenMinutes1]

If there are 4 pencils and 4 dollars why do the pencils need to cost 1 dollar each? Why can't they cost 0.10 dollars or even 1.10 with the remainder of pencils unpurchasable?

[@juanpedroperezperez1420]

i will make it easier for you if there is 1 pencil and 1 dollar

[@Super46666]

🤦‍♂️

[@ethanpetersen810]

If they costed more than a dollar then people wouldn’t have enough money to buy all the pencils. If they were less than a dollar then people would probably want to buy more than 4 pencils so you might as well raise the price and only sell to those who are willing to pay more. You ideally want to sell all of what you have for as much money as possible.

[@gregoryw9]

TL:DR; buy Bitcoin.

[@metaparcel]

If you are on KZbin, you are also part of the mainstream media. More subs means more viewers means more subs means getting quoted by the established media outlets means more subs and so on. I don't know why KZbinrs don't think they aren't part of the mainstream. You, by definition, cannot be more mainstream than by posting on KZbin for the purpose of disimenating information to the masses. Good vid though.

[@derrickmelton5844]

Considering one of the most prominent Austrian economists, Friedrich Hayek, understood how damaging deflation is, I call BS on your spiel. Come back when you start talking about an economic model that factors in the basic principles of supply and demand for the goods and services that the currency is predominantly used to purchase, and how market frictions and the inefficiencies in meeting demand via increasing supply attributes to increased costs of those goods. Also to anyone who believes this video is correct: Hope you don't ever need to take out a loan, as deflation increases the real value of your debt making it more beneficial to the creditor than the debtor, unless you have a negative interest rate (yeah right lmfao)

[@matrixman8582]

In inflation, people take out debt for consumption. But in deflation as prices fall, people don't need to borrow money in the first place, which decreases demand for loans, and can put their savings in the bank, which increases supply for loans. Governments and corporations sre the biggest borrowers so they would be hurt the most during deflation.

[@matrixman8582]

This is from 4 years ago when I was blinded by goldbuggery. This video is misleading by saying forced deflation is a good thing. I'm still a libertarian, but a gold standard and fixed echange rates are govt interventions into an otherwise freely moving currrency market. I used to think that without govt, the currency would gain value over time and the economy would experience periods of deflation. But in reality, banks create money through fractional reserve lending. This is a good thing however, because you want currency to have a medium of exchange function. There's no benefit to society if everybody hoards dollars. After studying economics at university, I've become pro fed, though I believe they should have less discretion and prioritize recession prevention.

[@DistributistHound]

This is what Douglas Social Credit could fix, that financial credit reflects real Credit or that 4 dollars are available to buy 4 pencils

[@santhosh4025]

Cantillion effect. POV:Here following the GME Stonks 🚀🚀🚀

[@SeptimusPrime]

So I'm guessing freezing both inflation and deflation would help everyone on the planet.

[@matrixman8582]

No freezing inflation. Deflation is natural

[@vigilantclips5912]

I like the debtors

[@gothlips6388]

Im too dumb to understand 😓

[@Anarchistarchitect]

We only need 21 million units of the he currency to run the economy 😊

[@FEJK82]

But why do the pencils go up in price. Cost $1, government spends, why change from $1

[@Collectorofsats]

Bitcoin commercial

[@GeneralAkAbA]

Like Lenin said...to destroy capitalism you first have to debauch the currency.

[@matthorrocks6517]

This monetary video was likely demonitized.

[@mindfields88]

sounds like Mark Zuckerberg's voice, doesnt it?

[@huixinnyyy]

YOOOOOOO

[@TheMmiguelito]

By design...

[@juddbrady1825]

This is why all us poor b stards getting ripped off should go out in our tens of millions and just take it back. Starting with Buckingham palace

[@lucasmontgomery1545]

this is quite a bias overview of inflation,people spending money is good for the economy and if there was not inflation any business which did not provide an essential service would be worse of because everybody would be saving moeny and consumer spending would go down and then people would be payed less and a ressesion would occur

[@ethanpetersen810]

People aren’t thinking about future inflation when they decide to buy something. That’s true with nonessential goods too. People buy non essentials regardless of inflation because they want them. If people are always saving their money instead of buying a business’ product, then the business shouldn’t be making that product.

[@reuvensg]

The great pencil war of 1908, terrible time for humanity

[@ALiensmoney-k5x]

did not get anything

[@HaiderAli-fu9bu]

I want to buy PS5 now, but next year it will be cheaper.

[@brukernavn142]

Yes and Sony will increase their sales when doing so too.

[@ZetaMoolah]

Lol Halo music

[@hanspanzer]

Bitcoin? anyone?

[@johnynoway9127]

The voice hurts my ears and goes trough my eyes

[@S_Uchiha89]

I like the presentation of the video and the content but human beings are motivated by competition or some other driving force that lets them standout individually. If you look back at how quickly our civilization advanced in recent decades you will realize that it has a correlation with monetary inflation. Previous eras before the introduction of fiat were much slower because inflation wasn't as pervasive as it is now and for the largest part metals or any commodity used as a method of transaction was technically 'fixed'. Removing inflation would give significantly more people the ability to afford items or services that should be considered exclusive and you automatically start creating a dystopian world. I think there should be a balance - strict inflation or strict deflation can never be the answer.

[@KevinSmall]

BITCOIN **end story**

[@exedeath]

Bitcoin is inflationary. Imagine you have a coin called bubacoin that have a limit but this limit will happen only after the heat death of universe. If you think bout it, this bubacoin is inflationary because you will ALWAYS have more money being printed (since it would stop only at a moment the universe wouldnt exist anyway). The same happens with bitcoin, since bitcoin will only stop "printing coins" at a very distant date, its basically inflationary currency. If you want deflationary currency, get an 100% premined altcoin (the ones like ripple, where the develoepers own all the coins and distribute as they want doenst count). Nxt and ardor are examples of this thing. Someone problably already made an fork of bitcoin that is literally just like bitcoin but all the 21000000 coins were distributed between the coin holders at the start of the coin based at the amount of coins they had.

[@DarkTutoxt]

@@exedeath what a stupid comment, bitcoin supply increases logarithmically, for example we have almost 18 millons coins already mined in the first 10 years, and the last millon will be mined on about 100 years, also bitcoin forks are not bitcoin, if that were the case you could programatically create thousand of forks per day and already be millonaire

[@exedeath]

@@DarkTutoxt This doenst mean bitcoin is not inflationary, it just means its less inflationary than normal coins. Also I am talking about a bitcoin fork where the program distribute all the non transaction fee coins that still need to be mined to the fork wallets based at the amount of coins the wallets have and now no new coins is generated (only transaction fees are mined). I am saying that it would be possible to create this fork and if someone made it, you would have an coin that is basically bitcoin but not inflationary at all.

[@drek273]

@spaceman00 so is altcoin inflationary?

[@KevinSmall]

@@exedeath bitcoin forks are not Bitcoin

[@napospapas4484]

Deflation is bad for the economy because it stops people from investing.Why to take risks when you can get for example 4-5% per year due to deflation?Money becomes expensive for businesses and many of them go bankrupt.Countries will go bankrupt.. everything will collapse..

[@matrixman8582]

No it encourages responsible investment. Deflation is actually a result of investment creating greater production

[@DarkTutoxt]

unless they provide real value, deflation rewards productivity

[@mohammedshadab769]

If you follow islamic finance you would get that stability

[@napospapas4484]

The stability of Islamic 3rd world countries..

[@mohammedshadab769]

napos papas check out islamic finace in youtube it is the ufastest growing banks in the worlld

[@napospapas4484]

They grow fast because they get money from drug dealers and from arm dealers.They don't ask many questions in Mauritius and Dubai..

[@farticlesofconflatulation]

Of course. Everyone knows how prosperous the finances of Islamic nations are. 😂

[@kolia4633]

WTF - please explain "islamic finance" to me

[@behrensf84]

Rubbish. If we let gold be our money, as you suggest from the image, and a huge gold deposit is found, then a huge uncontrolled rise in prices will occur. Similarly, if productivity were to double, but there is no money to buy your product with, there is no way for the economy to grow.The whole point of the federal reserve is to control the amount of money flowing, so it is just right to keep things moving. Just like the grease on your bike chain. Too much and it’s slippery, too little and it grinds.

[@Koushi82]

you are not thinking outside the box. it doesn't need to be gold. but it should be tied to productivity. production of gold/silver/wood/oil/gas/electric/natural resources/patents/healthcare/education. currency is only a unit of account gold/not it doesn't matter at all. but it should not inflate artificially without an increase in production. eg fake increase of production.

[@tdreamgmail]

If productivity doubled and the money supply stayed the same, the prices would have to go down. The point of the FED is to keep elites in their position of power forever, they do not compete like the rest of us. If they fuck up they just print more money or get a taxpayer bailout. Then idiots like you think it’s the natural order of things because you don’t know any better.

[@matrixman8582]

Lol. If money was backed by gold then prices would fall. Printing pieces of paper and putting dead presidents on them doesn't increase the wealth in society. If someone wants something that someone wants, they have to produce something that someone wants so he gives him he wants. People want to trade in a currency that is widely accepted and that retains value, which historically has been gold and silver. As more is produced, more can be bought in that currency. This encourages savings and investment, which increases productivity, which increases purchasing power, and the cycle continues

[@Ivan-cb4fv]

That is too low-quality explanation. Inflation is discussed as a hidden tax, while truth is completely opposite. To understand that, you need divide people on three groups: poor, middle class and rich. 1)Poor people are the best benefit-gainers from inflation because they have no savings. Their minimum wages and expenses tend to be in a balance, no matter how prices change on both sides. Meanwhile, since they don't lose anything from inflation, they become closer to all other categories, or in other words - it is harder to afford for rich to employ poor people, so inequality shortens. 2)Middle class are second best gainers from inflation because they have heavy debts for mortgages, loans etc. Middle class are real people that are not a threat for economy. It is so false to represent them as a dark people in suits on this video. Inflation literally provides a chance for middle class to jump into rich category, if they do right actions. 3)Rich people are the only real losers from inflation. While they tend not to use borrowing at all, they have huge savings, and these saving evaporates, therefore making rich people closer to middle class, i.e. creating more equality Therefore., inflation is mostly a hidden tax for rich and super rich, while for others its the only tool to decrease inequality.

[@GetYoJonesOn]

Ivan most of the super rich have assets that gain value as inflation increases. Not many super rich just sitting on cash. They’re in real estate (gaining tax benefits) and the markets having their money work for them. Poor people lack assets and so inflationary periods do not provide much opportunity to grow.

[@tdreamgmail]

Rich people put the capital to work.

[@cancelled_user]

Ivan, WTF? Rich people often use huge amounts of debt. The difference is that they use debt to create (or increase) their wealth by buying assets. They borrow money to build streams of income that make them richer and even pays off the debt. On the other hand poorer people use debt to buy food, clothes and sometimes even things they can't really afford, including unnecessary garbage. Also, rich usually know how to protect their money from inflation. They don't hold their money under the mattress or in a current (checking) account.

[@matrixman8582]

This is probably the dumbest thing I've heard. Poor people have little to no assets and debt. Rich people have most of their money in assets and have a lot of debt. Ever since we went off the gold window, real wages have stagnated and wealth inequality is at an all time high

[@Ivan-cb4fv]

So many comments with low-quality thinking... 1)You say rich will become richer from inflation - false. The best case scenario for rich is to preserve existing value of assets by having everything in inflation-protected assets. You don't become rich from owning gold, you simply preserve value. Gold is not producing anything for you. To become richer, a rcih person needs something else rather than inflation, like investing in growing perspective asset. 2)You say rich get debt relief. False again. WTF? Since when owning a house under a mortgage became a quality of rich people? These are middle class who are the most indebted and who receive the highest benefit from debt losing value. Bu arguing with my points, you basically suggesting entire population to repay debt levels that are extremely high. And you try to say that alternative is worse, but you're failing to give any decent reason why it is worse. Because it is better.