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To: Mike Johnston who wrote (75278)	12/11/2006 1:06:00 PM
From: Oblomov	Read Replies (1) \| Respond to of 110194

The largest shifts in wealth occur in high inflation environments. The wealthy benefit from inflation, because they are early receivers of newly created money. The poor are late or non receivers and inflation hits them right in the pocketbook (rising living costs, wages not keeping up) That is why wealth inequality is largest in countries that experience frequent inflation episodes. When you say that they are the early recipients of the newly created money, what do you mean? What is the process whereby they get this new money? I thought it was because the wealthy in these countries keep their assets offshore, in USD or EUR, or in foreign capital markets. The middle class and poor blithely keep their assets in the local currency, and become impoverished as a result.

To: Mike Johnston who wrote (75278)	12/11/2006 1:11:43 PM
From: russwinter	Respond to of 110194

Bingo, somebody finally nails the genesis of this long, circular, and rather odd discussion so far!!

To: Mike Johnston who wrote (75278)	12/11/2006 1:31:01 PM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

'That is why wealth inequality is largest in countries that experience frequent inflation episodes' But wealth inequality really took off in this country during the Reagan years in the post inflationary period. With little let up other than a brief period in the 90's. Since this country has been 'fiscally irresponsible' for 35+ years running perhaps that is the hidden reason for such wealth inequality today..

To: Mike Johnston who wrote (75278)	12/11/2006 1:38:51 PM
From: aknahow	Respond to of 110194

Inflation indeed hurts the poor, but there are a lot of easier ways to explain why than saying they are the early receivers of newly created money. The rich can and do buy real assets, as well as stocks. Such assets appreciate with or faster than the inflation. The poor, in most cases, own no land, not even the land they occupy. Wages lag inflation. Subsidized agricultural credit is justified as a means of helping the poor, but leads to loans to the already rich who have influence and are better credit risk. Inflation often leads to price controls on food stuffs, again justified as protection for the poor, but hurting the poor farmer. Nor does it really help the poor urban dweller as it leads to shortages of food as it no long pays to risk growing food crops for sale. One could go on and on. Unfortunately the poor support the ones that promise to do the very things that will cause inflation.