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Why inflation can actually be good for everyday Americans and bad for rich people - CNN

Not sure how the headline identifies how inflation is bad for rich people. Also, there are a lot of assumptions around the positive results such as wage growth, appreciation of real estate etc.
A lot of the article focuses on very near term trade offs.
From the article >> "Another group getting hit are people with exposure to government bonds — think households with more than $1 million who typically invest in both equities and debt. "

The idea that the people who have a balanced asset allocation strategy are going to get hurt more by high inflation is "interesting".

I think inflating away debt sounds like it helps poor more. But if you want to inflate away your $20k in CC & car loan debt, while I "inflate away" my mortgage and real estate value... I'm cool with that.

That VISA/Mastercard stock that skims off a small percentage of every transaction... darn looks like their profit will inflate as well.

High inflation hurts everyone, and when you hurt everyone, the poor tend to get the worst of it.
 

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Not sure how the headline identifies how inflation is bad for rich people. Also, there are a lot of assumptions around the positive results such as wage growth, appreciation of real estate etc.
A lot of the article focuses on very near term trade offs.
That article was just bad in so many ways. Looks like some girl had a shower thought that was just wrong and nobody at CNN cares as long as the title generates a few clicks

The mainstream media is a joke. They can't compete with internet content creators so they end up with the morons who never figured out how to publish their own content themselves publishing lazy clickbait content for the morons who still read it. Stop clicking and reading that stuff

Inflation hurts the poor, the middle class and the savers. The rich can use their inflated assets to borrow cheap debt to buy more assets that are being inflated. All tax free
 

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Probably unfair to say "some girl had a shower thought"

About
  • Allison Morrow is a Senior Editor and the lead writer for the CNN Business Nightcap newsletter. She joined CNN in 2016 as a Senior Producer for Social Publishing. Before that, she was a news editor at The Wall Street Journal.

    In her current role, she assigns and edits breaking news on subjects including business, markets and the global economy. In the Nightcap newsletter, Morrow offers pithy musings on the biggest business stories of the day.

    In her nine years at WSJ, she specialized in coverage of the Asia-Pacific region, based in Hong Kong and New York.

    Morrow holds a Bachelor's degree in journalism from the University of Missouri-Columbia. She lives in Brooklyn.
 

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Morrow holds a Bachelor's degree in journalism from the University of Missouri-Columbia. She lives in Brooklyn.
Oh my mistake

I didn't know she had a bachelor's degree in journalism. That does make her an expert in the global economy after 5 years of "social publishing" Maybe she can explain to simpletons like me how inflation is good news for GICs

Why do people think journalists know what they're talking about? They are experts are generating clicks and ad revenue

Otherwise she would be working on wall street
 

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Bank of Canada will hike rates this month: J.P. Morgan
Economists at J.P. Morgan expect the Bank of Canada will raise its benchmark interest rate at its Jan. 26 meeting, ahead of the central bank’s own timeline for liftoff.

“Based on rhetoric from the Bank of Canada in December, it was clear that labour market dynamics and outperforming economic data had created heightened concerns at the Bank that the output gap was closing more rapidly than expected,” wrote Silvana Dimino, a New York-based economist at J.P. Morgan, in a report to clients Tuesday.

Dimino sees the Bank raising its benchmark rate by 25 basis points to 0.5 per cent in January; her team previously called for the first move in April. She expects there will be five rate hikes this year, which would push the benchmark rate to 1.5 per cent by year-end.

She also expects the Bank to begin a modest run off of its balance sheet in the second half of this year.
 

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We haven't seen much inflation on our spending, other than a few extra bucks for gas and groceries.

The extra cost would be less than 1% of our total income.

We are getting a 2.7% increase on 80% of our total income, so we will have more discretionary income to put into GICs.

It is likely the interest on GICs will be rising as well, so it all works out for us.

I don't think we are unusual, so a lot of people are likely in a similar financial situation.

There has been low inflation and low interest rates for so long that some people think it is normal and has always been that way.
 

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U.S. inflation rises to another 40-year high of 7%
TD Bank senior economist and director Leslie Preston said while the figures are eye-poppingly high now, consumers should brace themselves for even higher numbers in the months ahead.

"Buckle up," she said. "After reaching new highs, core inflation is likely to get even higher in the first quarter of 2022 on a year-on-year basis as price levels are compared to relative weakness in early 2021."

  • The consumer price index, an inflation gauge that measures costs across dozens of items, rose 7% in December from a year earlier, the fastest pace since June 1982.
Used vehicle prices, which have been a major component of the inflation increase during the Covid pandemic due to supply chain constraints that have limited new vehicle production, rose another 3.5% in December, bringing the increase from a year ago to 37.3%.

central banker lost their minds.
 

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Better not buy a used car right now then.

If people can't manage a couple of 0.25% interest rate hikes they are already in big trouble.

Nobody promised interest rates would remain at historic lows forever and there would be no inflation.
 

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Better not buy a used car right now then.
I seriously goofed on the car issue.

Just before covid hit in 2019, I was looking at getting a small car, something like a Hyundai Elantra or maybe Toyota Corolla or Honda Civic. I checked a couple dealers but wasn't loving the prices, so I passed, thought I would wait to find a nice, lightly used second hand one.

I would have actually bought a brand new one as well if I found a good dealer clearance but there weren't any available at the time I looked.

In fact my dad even had an old Corolla. It was pretty old but I could have easily fixed it up myself. At the time I thought the pandemic would be over in a year, so when he told me he wanted to get rid of it, I said I didn't want it (thinking I could buy a newer one) and my dad got rid of that Corolla.

Double oops on my part! Now with covid it's become impossible to buy this kind of car, certainly not used or lightly used.
 

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I don't think we are unusual, so a lot of people are likely in a similar financial situation.
On a pension that increases faster than your expenses? That's not common for anyone under the age of 60

For young people with long time horizons inflation is a real problem. For old people who happen to be making the decisions it's good news for all the assets they already had time to accumulate. If they want to upgrade they have an inflated asset to trade in. They must think like you that this is not unusual.

Most people do need to buy cars and RE in their future and don't have valuable assets to trade in especially first time buyers
 

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I seriously goofed on the car issue.

Just before covid hit in 2019, I was looking at getting a small car, something like a Hyundai Elantra or maybe Toyota Corolla or Honda Civic. I checked a couple dealers but wasn't loving the prices, so I passed, thought I would wait to find a nice, lightly used second hand one.

I would have actually bought a brand new one as well if I found a good dealer clearance but there weren't any available at the time I looked.

In fact my dad even had an old Corolla. It was pretty old but I could have easily fixed it up myself. At the time I thought the pandemic would be over in a year, so when he told me he wanted to get rid of it, I said I didn't want it (thinking I could buy a newer one) and my dad got rid of that Corolla.

Double oops on my part! Now with covid it's become impossible to buy this kind of car, certainly not used or lightly used.
Yikes.

There are still some deals out there but you have to look long and hard.

I bought a new winter beater in October. Picked up a 2015 Mazda 3 GS with only 90k for a little over $11k.

Not a bad price for that, honestly.
But it did take me some searching and digging.
 

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RE inflation got in to virtual world.
Real estate in virtual worlds — sometimes called the metaverse — is going for millions of dollars in some cases.

The most expensive spots are near where lots of users congregate — for instance, someone recently paid $450,000 to be Snoop Dogg’s neighbor in a virtual world called the Sandbox.

https://www.cnbc.com/2022/01/12/investors-are-paying-millions-for-virtual-land-in-the-metaverse.html
Sounds a lot like the .com craze of the late '90s. I'm not surprised that the younger generation is repeating the mistakes of the past...
 

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The metaverse sounds like a big con job to me.

They put out a press release and claim somebody paid millions for this and millions for that, but nobody does an audit to make sure the "sales" were legitimate.

There is a massive amount of fraud, price manipulation, and outright lies in the crypto world.

At the core, it is all based on nothing of value and that never works out well for people who get drawn into the hype.
 

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Oh my mistake

I didn't know she had a bachelor's degree in journalism. That does make her an expert in the global economy after 5 years of "social publishing" Maybe she can explain to simpletons like me how inflation is good news for GICs Why do people think journalists know what they're talking about? They are experts are generating clicks and ad revenue
Otherwise she would be working on wall street
I am not sure if you are purposely ignoring the facts of this woman's experience or you just have a limited attention span. If you read her bio you can see that in addition to her BA in Journalism she has 5 years at CNN she and 9 years at the Wall Street Journal. I think 14+ years in a profession should give someone credibility, Just because you may disagree with this particular article does not mean she is not credible.
 

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CNN is credible? Do you live under a rock?

"Why inflation can actually be good for everyday Americans and bad for rich people - CNN"

Inflation is not good for everyday Americans. Textbook fake news clickbait for boomers. 0 credibility
 

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I am not sure if you are purposely ignoring the facts of this woman's experience or you just have a limited attention span. If you read her bio you can see that in addition to her BA in Journalism she has 5 years at CNN she and 9 years at the Wall Street Journal. I think 14+ years in a profession should give someone credibility, Just because you may disagree with this particular article does not mean she is not credible.
Based on the incredibly poor quality of the content, I do not find her to be credible on financial matters.
The "facts" cited aren't referenced, and they're also silly in application.
The actual argument/premise of the article isn't true, and the case to support it is laughably bad.

The writing itself however is excellent, it's just the factual content that is lacking.

I don't think anyone was denying that she's a good writer, but to suggest she is a credible or competent authority on anything financial is interesting. I don't think anyone competent in finance who was concerned about their reputation would have submitted such a poor article in the first place.
 
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