But the wealthy have more assets than debt, so they have more losses than gains from inflation. Sure, they may gain $100,000 on their house, but they lose $1 million on their bond portfolio.
Inflation does not imply growth in real GDP, no.
> which generally raises the value of equity holdings. The impact of inflation is dependent upon asset allocation.
Ceteris paribus, inflation hurts debtholders (who, incidentally, tend to be wealthy), and it helps debtors (who, incidentally, tend to be poorer).
Is this controversial?
>"This is backwards. Inflation destroys the value of debt. Poor tend to be borrowers and rich tend to be lenders, so inflation is an equalizer."
chimeracoder seemed to be agreeing with this "equalizer" position by saying:
>"Ceteris paribus, inflation hurts debtholders (who, incidentally, tend to be wealthy), and it helps debtors (who, incidentally, tend to be poorer)."
Now, true, if you're a worker who owes money, and inflation kills your cash flow (because raises come later than price increases), it may not matter to you that the value of your debt decreased, because the cash flow problem is going to bankrupt you before the debt erosion helps you. But it's still a separate effect.
Also, this is ignoring that anyone sane issuing debt plans for inflation and accounts for this somehow (interest rate schedule, etc)...
Edit:
Another thing, this "inflation helps the poor idea" seems to be a version of trickle down economics.