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No Wonder The Super-Rich Love Inflation

Asset inflation benefits the super-rich more than anyone else because they own the vast majority of these assets.

With the reflation euphoria running full blast, maybe central banks will finally get all that inflation they’ve been pining for. So let’s ask cui bono–who will benefit from inflation?

The Super-Rich love inflation and the money-printing that generates it. Longtime correspondent Michael M. explains the dynamic behind billionaires’ adoration of inflation:

“Why does a game of Monopoly work? Because there is a zero-boundary for every player’s net worth.

If you were given endless credit (so negative net worth is allowed without limit), the game becomes pointless.

Is there also an upper bound at Monopoly?

Well, the bank at Monopoly can run out of money, I had that happen a few times while playing. But we didn’t treat it as an upper boundary, but wrote the richest player an IOU and took that amount of cash bills from him and put them back in the bank to continue.

Rolling it around in my head, how else could you solve that problem? Confiscate the same amount from every (remaining) player and put it back in the bank instead? That would be pointless if most wealth is with one player and you want the game to continue.

Another option is to go Keynesian [in its true practical implementation] and confiscate 10% of each player’s net worth to “re-liquidate” the bank. This is very similar to “printing money,” just more explicit. Now we’re getting somewhere.

But that’s linear (a fixed percentage), so why not go with progressive confiscation rates, and take a higher percentage of the wealthier players’ net worth?

Wait a second, did I just stumble over the reason why the filthy rich love Keynesian economics? Because printing money only “taxes” everybody linearly, which is much better for the rich than progressive taxation, which is the global standard in income tax policies.”

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