What do you think about effects of inflation in society?

Question

What do you think about effects of inflation in society?

Answer 1

Inflation makes the rich, richer?  hahahah That would be a foolish answer.

Inflation makes (EVERYBODY) poorer.  Inflation by definition is Too Many Dollars Chasing Too Few Goods. What that means is that the very money we use for trade becomes worthless. If Inflation is 10% per year, than a rich man with $1,000,000 in the bank will lose $100,000 of purchasing power in 1 /year. A way to explain that is:

10% Inflation effect on Widgets:

========================

Year 0: $1,000,000 Buys You a Private Airplane

Year 1: $1,100,000 Buys You a Private Airplane

10% Inflation effect on Citizen Joe w/$1,000,000

=====================================

Year 0: Joe can buy a $1,000,000 Private Airplane

Year 1: Joe cannot buy a private plane because it costs

$1,100,000 and Joe had his money stuffed in his mattress

which didn't keep up with Inflation.

You see the problem?  Even the rich are impacted. But on relative terms. It'll be a long time before Joe will go hungry or cry about the price of Milk in the store. But Joe is getting poorer every year with the rest of the people.

Inflation Impacts Everybody.

Answer 2

It affects people in the sense that basic commodities such as food, gas, etc, are more expensive than before.

Also, firms make more workers redundant since they cannot cope with the extra costs.

Answer 3

Inflation causes the rich to get slightly richer, and the poor to get very much poorer.  A person who makes $100 p/h doesn't notice the increase in say fuel cost from $2 to $4 per gallon.  The person making $7 an hour defiantly feels it.