this post was submitted on 18 Sep 2023
239 points (96.5% liked)

World News

39096 readers
2312 users here now

A community for discussing events around the World

Rules:

Similarly, if you see posts along these lines, do not engage. Report them, block them, and live a happier life than they do. We see too many slapfights that boil down to "Mom! He's bugging me!" and "I'm not touching you!" Going forward, slapfights will result in removed comments and temp bans to cool off.

We ask that the users report any comment or post that violate the rules, to use critical thinking when reading, posting or commenting. Users that post off-topic spam, advocate violence, have multiple comments or posts removed, weaponize reports or violate the code of conduct will be banned.

All posts and comments will be reviewed on a case-by-case basis. This means that some content that violates the rules may be allowed, while other content that does not violate the rules may be removed. The moderators retain the right to remove any content and ban users.


Lemmy World Partners

News !news@lemmy.world

Politics !politics@lemmy.world

World Politics !globalpolitics@lemmy.world


Recommendations

For Firefox users, there is media bias / propaganda / fact check plugin.

https://addons.mozilla.org/en-US/firefox/addon/media-bias-fact-check/

founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
[–] DieguiTux8623@feddit.it 7 points 1 year ago (1 children)

So we should expect more interest raises to efficiently transfer money from the poor to the wealthy... ehm... keep inflation at bay...

[–] JasSmith@kbin.social 1 points 1 year ago (3 children)

High interest rates and inflation hurt people with money and help people with debt. As interest rates rise, the value of assets decreases. The inverse relationship is strong and well tested. Debt, on the other hand, loses value with inflation. Inflation paid off 20% of my mortgage over the last few years.

No one likes high inflation. It’s definitely not a scheme to transfer wealth. That’s the status quo with 2% inflation and cheap debt for the wealthy to use.

[–] aesthelete@lemmy.world 1 points 1 year ago* (last edited 1 year ago) (1 children)

High interest rates and inflation hurt people with money and help people with debt.

Lol, wut?

[–] ImFresh3x@sh.itjust.works 0 points 1 year ago* (last edited 1 year ago) (1 children)

Inflation allows borrowers to pay lenders back with money worth less than when it was originally borrowed.

Inflation is in fact a massive transfer wealth from the lenders to the borrowers, measure in trillions.

Econ 101

https://www.khanacademy.org/economics-finance-domain/ap-macroeconomics/economic-iondicators-and-the-business-cycle/costs-of-inflation/a/lesson-summary-the-costs-of-inflation

https://www.investopedia.com/ask/answers/111414/does-inflation-favor-lenders-or-borrowers.asp

https://www.marketwatch.com/story/why-inflation-could-create-a-giant-wealth-transfer-from-lenders-to-borrowers-11623876205

I’m not saying runaway inflation is generally good. It’s not, especially if ongoing for long. I’m just talking about lenders and borrower.

The impact of interest rates is a lot less cut and dry.

[–] aesthelete@lemmy.world 2 points 1 year ago* (last edited 1 year ago)

Yeah the combination of the two is what made me have the reaction I did.

I don't think interest rates being high are a net negative for all people with money. It's great to be able to plop your money in a bank account and earn generally more than inflation in interest right now risk free.

Generally, high interest rates are going to be bad for borrowers. I think high inflation coinciding with high interest rates isn't particularly geat for most, but it's harder if you have no money because you need the ability to take on debt, and that debt is going to come at high interest rates.

Some credit cards are at 30% interest rates, in no way is that good for those who need to borrow.

Inflation is also a-ok for asset holders. It's cash you don't want to be holding in times of high inflation.

[–] Cryophilia@lemmy.world 1 points 1 year ago

It's crazy how brainwashed people are. High interest rates are excellent for regular people except those carrying credit card debt. But people think the fed is somehow harming them.

[–] ImFresh3x@sh.itjust.works 0 points 1 year ago

Ya I feel pretty lucky tbh. Bought a house 2.6%. And the value of my home has gone up tremendously, meanwhile the value of my principal has been slashed. Timing feels criminal. Unfortunately most people aren’t so lucky, and I am very aware that benefiting from a crisis.