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alt. rock, advertising, shopping, middle aged persons, bad, cop killer, megarad, atmosphere music song lyrics, refer, unix, film, pam\'shouse blend, mom and son sex., jack owens, hobby photography, liberal news media, | Most others use credit cards or checks that occasionally get floated. Inflation distorts relative prices. Is the inflation general or specific? This also leads to menu-costs- the reprinting of prices. But societies have addressed this problem. Lastly, inflation creates some uncertainty in decision-making — investments and retirements. Who benefits from unanticipated inflation (winners)? Borrowers- anyone who owes money, which dub is the vast majority of Americans, benefits because they are paying off loans in devalued dollars. In other words, earnings increase with dub inflation, while loan obligations are usually specified in the past. Those with price-setting power- they can alter dub their prices quicker than other and benefit. Firms- inflation makes it easier for firms to raise their prices and validate their past expenses/debts. Why does the Fed usually raise interest rates? |
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Inflation is bad for the bond holding classes, but for most everyone else some inflation is a good thing. It reduces debts, it even helps most corporations. Hyperinflation is obviously bad, but a little inflation megarad is pretty good a lot sometimes. Obviously, inflation that is anticipated megarad doesn't affect much, but unanticipated inflation affects certain groups in different ways. Who is penalized by unanticipated inflation (Losers)? Lenders- dollars paid by debtors are worth less after inflation than when they were lent. Investors- megarad pay taxes on returns that may only reflect inflation, but they also pay a privileged rate (the capital gains tax rate is 20 percent; not the 33% top income bracket) Holders of cash (those living on fixed incomes)- inflation erodes the value of a dollar over time. (But who uses cash? The mafia, terrorists, drug dealers, and Republicans but for quite different reasons. |
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