>>10603>[…]only wealthy people will suffer.
I don't think so.
The wealth of these ppl isn't only backed by
Dollar-notes in a bank,
which are fiat,
which is essentially worthless,
if you really think about it what 'fiat'
actually means, since it isn't backed by gold any more.
Even if their individual expertise might be limited,
have 'access' to the smartest, most educated
'minions' around the world.
Most of these ppl do not horde their money,
but spend it.
There are 'rich' people that are
technically 'broke' at the end of every month,
because they managed to spend all their money in
Assets that in turn generate even more money as income
(very simplified representation)
This holds the benefit,
that if you're technically 'broke' you do not need
to pay taxes.
Furthermore, the low interest rates today make it possible
for the rich to get money 'for free' that they can invest
in even more assets per period of time,
so they can be 'in debt' which means they can
generate even more income within the same period of time.
The 'cheap money' just acts as a lever,
furthermore, yielding the positive side-effect of
being a 'debt' … -> no income generated… -> no taxes.
You get the point.
In the case of a hyper inflation,
there are four players on the field to consider:
1. Rich ppl, with assets and debt, a bit of money 'at rest'
2. Average ppl, without assets, but money in the bank
3. Average ppl, without assets, with dept
4. Poor ppl, without assets, without dept.
The first group, rich ppl with assets, dept and a little
bit of money will only loose their 'money at rest',
but will keep their assets.
The Poor ppl, will loose potentially nothing.
But the big loosers in this game will be groups
two and three.
The second group, ppl without assets but with money in
the bank will loose their money, leaving them with nothing.
Wether they loose their money due to governmental
takeover (think some crazy crash-politics, freezing
accounts and the sheer devaluation)
or due to the fact that they need to aquire assets,
during that time, which will be disproportionate more
expensive than the inflation would dictate.
(guess who is owning and selling these assets during
this time period ;) )
The third group of ppl, those with assets but dept,
will loose their assets, because their dept in case
of financial crisis will become over-due pretty quickly,
or interests might increase drastically,
which means they need to sell their assets as quick as
possible, otherwise their asses gonna be busted.
(guess who's waiting for them to sell their assets?)
The 'rich' will pay off all dept as quick as possible,
because they can afford it, if their dept-management
was wisely planned, so increase in interest wont hit them.
As soon as this is done, they will go after all these
lost souls that have to sell their assets,
becouse their dept would otherwise drastically increase.
This has to be done quickly, so that the buyers of the
second group have to buy from the first, and NOT from the
third group directly.
IN THE END,
If this hyper-inflation is over,
there will be the rich being richer than ever before,
and possibly all the average earners will be 'pushed down'
to the fourth group (no assets, no money).
Effectively the middle class will be gone.
From that point on,
there are only very few rich and masses of poor.
Socialism made by capitalism.