When inflation hits, who will be the biggest loser? Is it the rich who have a lot of money, or the poor who have nothing and no money, or the middle class in between?
In order to understand this problem, it is first necessary to recognize the impact of inflation on the overall economy. Regardless of the level of inflation, there will always be people who benefit and someone who suffers.
The essence of inflation is the depreciation of the currency, the price of **. Behind the price **, it reflects the change in the value of labor.
In inflation, some people suffer and others benefit. When we think deeply, we will find that although the so-called rich have huge assets, most of them are not cash, but assets such as **.
The value of these assets fluctuates with market fluctuations, so the real impact of inflation on the wealthy is limited. And for the poor, inflation also has a relatively small impact on them, as they hold little to no cash assets.
It is the middle class that is really affected. They hold a certain amount of cash assets, but this percentage is higher relative to the top rich.
As a result, when cash depreciates, the middle class suffers the most.
Inflation is actually a mechanism for redistributing wealth. It transfers the wealth of the middle class to the top rich and the poor at the bottom.
To avoid this shrinking wealth, the middle class needs to adjust its asset structure. Inflation mainly affects wealth stored in the form of cash, so converting assets to other forms, such as real estate, is an effective coping strategy.
The value of real estate is not usually directly affected by inflation, and buying real estate through loans can also use inflation to dilute the real value of the loan, thereby accelerating the growth of wealth.