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Comment by kkoncevicius | Hacker News Reader

The things is that markets adapt but lag behind. For a while the old prices are still in place while the money is being printed. Then, slowly, the market "notices" that the amount of money increased so the prices readjust. While the prices readjust - everything becomes more expensive. Your haircut is more expensive - so the hair stylists salary catches up. Your bread becomes more expensive so the farmers that produce flour also have their salaries catch up. Everything eventually catches up, except for the amounts of money that were allocated to savings.

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That’s not true at all. Salaries aren’t increasing at the same rate that food, goods, and services. Stuff gets more expensive at a greater rate than wages increase.

That's relative. If food gets more expensive - that money goes to someone, someone who is producing or selling food. Prices cannot increase without someone at the same time making more money.

That money doesn’t go to the people that need it. It goes to fuel, shipping, taxes, etc. the person stalking the shelves gets nothing, the person that works at the gas station gets nothing, the person on fixed income gets nothing, and on and on. Inflation only helps the top and the bottom gets recked.

I don't know, my hair stylist increased the price for a haircut 2 times during the past 2 years. She isn't rich by any means. People who work and can set their prices adjust fast. People who depends on salaries set by others lag behind, but eventually even the government wages catch up. What never catches up are the savings. If you had 10,000$ before inflation - that will be worth less after without any bouncing back.

I don't think we disagree.

Your hair stylist isn’t making more net profit. Rent went up, supply cost went, utilities went up, frequency of patrons gone down. You should ask your hair stylist if the raised prices are keeping up with their rising costs to operate.

And how much of that $10k will dwindle as your expenses go up and your income is no longer in surplus?

And that’s how profit is made!

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