freeman on Nostr: I love it! What a topic you chose haha I am pretty sure you know better than I do but ...
I love it! What a topic you chose haha I am pretty sure you know better than I do but since I take my job seriously here you have my answer.
Let's imagine that there are 3 people with the same salary ($1000), but different savings. Let's also assume the price of bread to be $1.
Person A. Savings $10000. So it can buy 10000 breads
Person B. Neither savings nor debt
Person C. Debt -$10000. It owes the equivalent to 10000 breads
All of them could buy 1000 breads a month with their salary.
Now let's say there is an inflation of 100% tonight, and that everything gets adjusted accordingly. Salary goes to $2000 and bread is now $2, so they still can buy 1000 breads with their salary.
However, person A could buy only $10000/$2=5000 breads with this savings, while person C owes only the equivalent to 5000 breads. Person B is not affected.
With this little example we can see how inflation erodes some people's saving and reduces others people's debt. Unfortunately, governments have amassed trillions in debt and their incentive is to keep on inflating the currency to mitigate their own debt, stealing our savings.
A pleasure doing business with you. Was it worth the Sat? 😄
Let's imagine that there are 3 people with the same salary ($1000), but different savings. Let's also assume the price of bread to be $1.
Person A. Savings $10000. So it can buy 10000 breads
Person B. Neither savings nor debt
Person C. Debt -$10000. It owes the equivalent to 10000 breads
All of them could buy 1000 breads a month with their salary.
Now let's say there is an inflation of 100% tonight, and that everything gets adjusted accordingly. Salary goes to $2000 and bread is now $2, so they still can buy 1000 breads with their salary.
However, person A could buy only $10000/$2=5000 breads with this savings, while person C owes only the equivalent to 5000 breads. Person B is not affected.
With this little example we can see how inflation erodes some people's saving and reduces others people's debt. Unfortunately, governments have amassed trillions in debt and their incentive is to keep on inflating the currency to mitigate their own debt, stealing our savings.
A pleasure doing business with you. Was it worth the Sat? 😄