/biz/ - Business & Finance

[Anonymous No.22214741]

I was told that inflation is good for the economy because it creates money velocity while deflation is bad because it reduces it. However, inflation clearly transfers wealth upwards - the wealthier and better-invested you are the more inflation favors you.

Would a deflationary monetary policy not do the opposite? Would it not transfer wealth back down to lower classes who save while the value of the currency rises thus stimulating more frivolous spending from the top?

I admit that I might be an retard.

[Anonymous No.22214821]

Pretty antisemetic thread - how about you delete this filth?

[Anonymous No.22214875]

>>22214741
It may well which is why it is unlikely to ever happen. The rich run the show and they obviously prefer it that way

[Anonymous No.22214983]

I reported and yet no jannie will delete this racsist thread? WTF is wrong with biz

[Anonymous No.22215494]

> Fed sets a deflationary target of 2% per year.
> Everyone is effectively free to spend 2% of their wealth for the year without worry because the value of their remaining wealth will rise to compensate it.
> upper classes are still well-invested; their overall wealth will actually grow with their businesses

[Anonymous No.22215711]

>>22214741
Wrong, money velocity creates inflation. If money is changing hands often it means that the economy is very unrestricted, this allows many people to take out loans, the principle on those loans creates inflation.

[Anonymous No.22215780]

>an retard

[Anonymous No.22215801]

>>22215494
Lmao, it'd be great but it doesn't work like that. If people are spending money then more people will take out loans to create products and services to collect that money. The principle on those loans causes inflation of the money supply. You could always increase taxes to decrease the money supply, but if people are going to lose more money when they spend they'll be afraid to spend.

[Anonymous No.22215802]

>>22214741
>I was told that inflation is good for the economy
You were indoctrinated; continue.
>it creates money velocity while deflation is bad because it reduces it.
Money velocity was made up by (((Friedman))) and is now being used to justify (((MMT))).
>However, inflation clearly transfers wealth upwards - the wealthier and better-invested you are the more inflation favors you.
Yes, you are right. Peter Schiff agrees with you. Probably the last good jew left.
>Would a deflationary monetary policy not do the opposite? Would it not transfer wealth back down to lower classes who save while the value of the currency rises thus stimulating more frivolous spending from the top?
Presumably yes. Note this happened in 19th century America, leading to mass immigration from the banker controlled Europe.
>I admit that I might be an retard.
You're probably stupid, but you're not retarded. Also, I have reported you for creating this anti-semitic post.

[Anonymous No.22215836]

>>22215711
No, you are wrong. Inflation is the expansion of the money supply. Rising prices is an effect of inflation.

[Anonymous No.22215859]

>>22215494
> Instead of beating inflation the new investment target is to beat deflation - is this better than just sitting on cash?
> Bonds now have a compound interest factor - the longer the term, the more valuable they become from deflation
> Leveraging debt becomes riskier - companies are less likely to take on as much debt and instead try to work with personal earnings more over time.

[Anonymous No.22215879]

>>22215801
>he unironically believes in MMT
How did taxes reduce the money supply in Zimbabwe and Venezuela?

[Anonymous No.22215924]

>>22214983
>>22214821
kek

[Anonymous No.22215926]

>>22214741
That chart is interesting because it divides the population in blocks of 20%. However, you draw one more division of the top 1% and most of that yellow just becomes another relatively small slice of the overall pie.

[Anonymous No.22215927]

>>22214741
>He trusted a British fag lord

[Anonymous No.22215931]

>>22214741
>Upper Class is not in the Wealthiest 20%
what is considered Upper Class in the USA?

[Anonymous No.22216025]

>>22215494
Just that no one wants to spend when your cash could buy more in some month's time. It's a devil's circle. But it would unironically not be a giant asset inflation scheme rewarding rich people as today's qe hell.

[Anonymous No.22216029]

>>22215931
Their labels are wrong. Plenty of doctors/lawers/small executives/high end of IT job types are 'rich' but nothing near the rich-rich point.
First chart I found that breaks it into 5 slices like op pic with numbers: https://www.thebalance.com/american-net-worth-by-state-metropolitan-4135839
>the wealthiest 1% of Americans now control 38.6% of the nation's wealth.

[Anonymous No.22216094]

Cantillon Effect anyone?

[Anonymous No.22216120]

>>22215836
Okay dipshit, what causes inflation?
>money printer go brrrrrr
Okay dipshit, who's buying the money?
Now you're going to give me
>Buying money?
>banks
Okay dipshit, now who is buying money from the banks?
>people who get loans
No one is getting loans
Velocity creates inflation. Not FED. Stop being stupid.

[Anonymous No.22216118]

>>22216025
eventually, that isn't true. at some point, a TV would be so cheap that a normalfag would buy one. really at some point, the price of any good would be so low that people would buy so much, the price would rise. the deflationary tailspin myth is a meme.

[Anonymous No.22216190]

>>22216120
inflation occurs when the fed buys government bonds by creating new currency, called federal reserve notes.

[Anonymous No.22216214]

>>22215879
>how does taking away the supply of money in exchange make something more valuable
This isn't even MMT, this is basic Supply and Demand economics. Honestly I can't imagine being as stupid as you. Read a book or something. There are countless sources on how these systems work, you pay like $50 a month to have access to all the worlds information and you willingly choose to be uneducated and spread misinformation on 4chan.

[Anonymous No.22216280]

>>22216214
>ask a simple question
>get ad hominem attacks in response
>hand-rubbing intensifies
answer the question Chaim

[Anonymous No.22216320]

>>22216120
>No one is getting loans
>Velocity creates inflation. Not FED.
well, where do you think all the money pumping the stock market during a pandemic is coming from?
why house prices increased 10 fold during the last 20 years?
asset inflation is real, so is the free money for big corps
look at ECB, giving away 15 billions at negative interest rates to Luis Vuitton, while some eu countries with 50% youth unemployment have to use private banks and pay crazy interests?
open your fucking eyes
yeah if you looks at fake stats USD is almost deflating, but do you really think this is real? Real USD inflation is skyrocketing, that's why stock and BTC can only go up
we are all gonna make it, drop your FIAT and stop paying taxes

[Anonymous No.22216365]

>>22216320
redpilled

[Anonymous No.22216399]

>>22216118
I think it wouldn't end rational business processes, but it would ensure a very efficient resource allocation as funding is expensive. Concerning the whole price development thing, i have to think that through first. Maybe that's true and i only summed up the intermediate effects.

[Anonymous No.22216403]

>>22216190
Hold up, so you're telling me, that the government is an entity that can take out loans?!?!?
THEY CAN EVEN DO IT WHEN THERE'S NO VELOCITY OR WIGGLE ROOM IN THE ECONOMY UNLIKE EVERYONE ELSE?!?!?
This simply creates bad inflation

[Anonymous No.22216404]

>>22216094
yes. government favoritism only distorts the market.

[Anonymous No.22216442]

you retards understand that you’re arguing over whether the rich should control 99.9% or 99.99% of the wealth right? you WILL get fucked in the ass regardless of whether the currency is inflationary or deflationary

[Anonymous No.22216528]

>>22216320
This is entirely true. And i wonder a lot why people don't get it. I even assume this to be the reason for rising animosity between people. The whole protesting blm stuff, the left vs right, populistics on the rise, it's all a symptom of angry, mostly young people beginning to realize they can't take part and won't reach the level their fathers had. Instead they will have to deal with gigantic debts.

[Anonymous No.22216552]

>>22216399
definitely agree on the resource allocation point. but an interest rate determined by market forces would reduce malinvestment and encourage saving by consumers. in turn, resources would be allocated more efficiently, and you'd likely have less waste.

[Anonymous No.22216567]

>>22216442
wrong, the moment you stop their money printing machine they are completely fucked since they cannot afford to run the propaganda machines

[Anonymous No.22216600]

>>22214741
The wealthiest 20% also pay 80% of taxes.

[Anonymous No.22216628]

>>22215780
an ere Étarde

[Anonymous No.22216653]

>>22216029
Plussing together the numbers in your link (the 20%-ones) and than devide the top 20% neth worth with the total gives 68,5%.

16,1%-points less, but still a huge number. Your link is regarding 2011, and also says the top 20% has gained 11% of the cake since 2000, which if it's a linear growth would set the top 20% at 75% of the wealth, only 9,6%-points from OP's graph.

It's probably not linear though...
Workers work for money. That lose value.
The closer to the top, the value is things with real value, like real estate, and companies (stocks). Top 20% for sure owns 95-99% of the stock market.

2000->2011 while the richest got richer S&P500 Lost about 15% value, and NAS100 Lost about 30%.
2011->2020 S&P500 have Gained about 175% and NAS100 have Gained about 450%.

So if the numbers in your link are correct. I think OP's graph is about correct as well.

[Anonymous No.22216842]

>>22214741
The goy is onto us.

[Anonymous No.22216877]

>>22216600
The cost of living and the value of the dollar benefits those that have more money in their pockets. The biggest wealth transfer began when the world blew up in the mid 20th century. The boomers are blamed for holding that wealth because that is when the wealth boom happened.

Because of inflation, the poor's only chance of getting ahead is finding better jobs. College can be pointless because look at all the different graduates that spent years taking loans out to pay for school so they could find that higher paying career job that almost doesn't happen. The rich however, do pay more in taxes because the more you make the higher amount of money you will pay in taxes. You could tax everyone from poverty level to corporate bosses 5% and the rich will always pay more because they earn more. They also don't work as hard anymore. They reach a point where the ones at entry level are doing the hard work like Amazon warehouses. Bezos may have worked to make Amazon what it is, but now he makes 150,000 per minute. That's the same amount that 6 working class citizens make in a year combined. The problem with Amazon is they've run other companies to the ground like brick and mortar stores because they offer convenience those stores don't offer.

[Anonymous No.22217495]

>>22216528
Agreed. It's all been one big smokescreen.

[Anonymous No.22217558]

>>22216320
Just a thought: what would happen between inflationary assets and deflationary monetary policy?

[Anonymous No.22218101]

Fuck up's with quality threads dying and shill-threads thriving.

Some BS.

[Anonymous No.22218207]

>>22218101
How new are you?

[Anonymous No.22218240]

>>22216094
How would the Cantollon effect work against a deflationary policy?

[Anonymous No.22218290]

>>22218240
* Cantillon

[Anonymous No.22218481]

>>22218207
It's less BS because it's old?

I don't agree. I'm of opposite opinion.
It makes it more BS.

[Anonymous No.22218708]

>>22218481
I meant that quality threads tend to die while shill posts don’t. I was agreeing with you.

[Anonymous No.22218756]

>>22218708
I know, and insulting me at the same time.
Well done.

[Anonymous No.22218796]

>>22218481
>>22218708
Well, we can try to stimulate discussion then can't we?

To throw more into the fire, how would bonds be affected as an asset? Would they be bought at a premium for a par value payoff perhaps? Obviously the interest rate must give better returns than deflation.

[Anonymous No.22219157]

>>22214821
this is such an underrated fpbp

[Anonymous No.22219418]

>>22218796
I was comfortable just reading for once but ok, as the thread is dying I'll wing in with my 5 sats.

>>22218240
I don't think a deflationary -policy- would work at all. It would be have to be bound to something that everyone has agreed has value, like gold or bitcoin.

But regarding the Cantillon effect, it's from Mr. Cantillon who lived when gold was the Money with big M.
So it works on gold as well. If the state owns the mines, the wealthy will get the gold first. It just gets more extreme with fiat, when they can literary print infinite amount of money.

If a more stable deflationary commodity like bitcoin was the world standard, states would own the biggest miners, power supply is something the government(s) are highly involved in after all even without bitcoin.
Handouts would still go to the most powerfull first as they have the most influens over the ones in power. It's more of a human thing than economical.
But it wouldn't be able to be made in that ridiculously extreme way and amount as last few decades. To rip off the people so much so fast, I don't think would work.

[Anonymous No.22220001]

>>22218796
Hard to say. Agreed that interest rates would have to rise. But not all goods and services would see infinitely lower prices.

[Anonymous No.22220538]

>>22216120
>shintaro kago art
nice