> especially among people who have money, because inflation erodes the value of savings.
What? Wealthy people don't buy CDs. They tend to invest heavily in assets. Often, these are leveraged assets like real estate or equities in a margin account.
NOTHING makes the rich richer like inflation. Reducing the burden of low-interest mortgage or margin debt whilst boosting earnings in equities.
Meanwhile, the poor still pay 20%+ on credit cards used to buy food that gets more expensive every year, and see annual rent increases from their landlord.
There's a reason that CNBC cheerleaders absolutely love ZIRP, and it's not because it helps the downtrodden poor.
My interpretation of the comment you're replying to is that "people with money" doesn't refer to the wealthy - who, as you point out, are typically asset-rich - but instead of a cash-rich, asset-poor middle class (or even anyone in the working class with some savings).
Certainly if you're currently saving up to buy your first house in large parts of the West, inflation is your bogeyman - it threatens to simultaneously drive up house prices further and devalue your deposit.
This argument mostly comes from the upper-middle-class types who make Friedmanesque arguments on the Internet, who seem to focus on their eventual retirement moved into low-interest assets like bonds. They want to make the big risky investments, then stop the whole economic engine once they're safe.
Actual Chicago economics arguments are much better than the ones you hear on the Internet. I think they're still pretty bad, but not as bad as the parodies based on first-half-of-the-first-semester Econ 101. HN in particular is often full of that kind of argument, because it attracts a demographic of exactly that top 20% who have lots of assets but enough in cash-equivalents -- or imagine they will some day real soon.
What? Wealthy people don't buy CDs. They tend to invest heavily in assets. Often, these are leveraged assets like real estate or equities in a margin account.
NOTHING makes the rich richer like inflation. Reducing the burden of low-interest mortgage or margin debt whilst boosting earnings in equities.
Meanwhile, the poor still pay 20%+ on credit cards used to buy food that gets more expensive every year, and see annual rent increases from their landlord.
There's a reason that CNBC cheerleaders absolutely love ZIRP, and it's not because it helps the downtrodden poor.