Fed target of 2% inflation

Why Am I So Poor?

I remember thinking/talking about “if there was inflation, who would benefit first?” and that was a useful thought for personal investment purposes… But, now I have been thinking, “Who benefits last?” and I believe the answer is POOR PEOPLE. It is Mr. Walmart Greeter, who lives paycheck-to-paycheck and because of a 10% unemployment rate, faces no prospects of a raise, yet pays 2% more for food and shelter.

If the Fed says they have a target of 2% inflation, then that means they are stealing 2% from America’s poor working class.

It is a mathematical fact that the volume of money changes the value of the money. The question I pose above is exactly how does that dollar change value… it doesn’t happen all at once to every dollar. It takes some time to propagate through the world economy. Someone benefits first have more dollars (2% more) and they can spend them on goods that are at preinflation prices. And some poor (literally) fool benefits last, because he pays 2% more for his goods, but uses his same dollars… If you are in the class of “too poor to own Real Estate and don’t own TIPS”, then you lose. Sorry the Fed just stole your money. Really it wasn’t literally a theft, but it was an invisible transfer of wealth from you to someone richer than you.

And we wonder why the gap is widening between the rich and the poor.