raghu wrote: > Why is inflation bad for the financier class? It is not like they have > cash stuffed under their mattresses - even if the dollar loses much of > its value, they still have all those ownership claims on the real > resources of society (stock, oil, gold, grain, houses etc).
you know, I have to think about this. It's true that the richies have highly diversified portfolios and don't have to worry about inflation (or anything but the most systematic catastrophe). They also have more information than most and the more ability to adjust, so that they can anticipate inflation -- adapting to it before it happens. (Nonetheless, their financial wing did suffer from negative real interest rates during the 1970s. Not diversified enough!) The financier fear of flation may be merely psychological, or rather sociological (part of their culture). Inflation may symbolize a loss of control. Back in the 1960s and early 1970s in the US, it reflected the uppitiness of their underlings. These days it may connote the possibility of the possible onset of the "most systematic catastrophe," referred to above. This might involve mere inflation becoming hyperinflation. Or it may be that inflation implies some transactions costs they don't want to pay. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
