Those who have borrowed money benefit from inflation though. If you have student loans or a mortgage, high inflation can work to effectively reduce how much you owe if salaries/wages go up with inflation.
For example, inflation typically triggers interest rate increases. If your debt is fixed rate that's fine, but if it's not, it might get more expensive more quickly than you expected, and your wage increase might not cover it.
Wealthy people own assets that keep up with inflation. They may have 10% in cash which doesn’t keep up with inflation but in general most of their holdings either keep up or outperform inflation. Poor people have wages that don’t keep up with inflation unless they start job hopping. The poor are typically more affected by inflation than the rich.
This reminds me of my neighbor who had recently retired and began a side business making furniture in his garage. He was just looking to make a little beer money, but his business grew quickly just through word of mouth and he was complaining to me that now it was more of a job than he had before he retired. He was thinking about shutting the whole thing down.
I've always thought this would be best. I recently saw signs instructing people to wait to merge in Duluth MN when I was visiting for work. People weren't abiding by the signs though and continued to behave in the normal random way they typically do when merging.
I remember seeing an article about a long term study of former participants of the show "The Biggest Loser." If I recall, almost all of them had gained the weight back and due to the extreme caloric restrictions they had placed on themselves during their time on the show the reduced their base metabolic rate significantly.
When you say "trapped at the zero bound" are you saying the control output is saturated basically? I'm thinking in terms of feedback control loops. I would agree that the FOMC doesn't have a lot of room to work with if we were to enter another downturn but they do have some range left in their controller. During the last downturn they reduced the federal funds rates to 0% and that stayed there for years but they are now back up to 2.4% I think. When dropping rates to 0% wasn't enough in 2008 they also reduced longer term rates by buying Treasury securities (operation twist etc). The ended up adding $4.5T of Treasury securities to their balance sheet by the end of it. They have been unwinding those positions for over a year now but the balance is only slightly less than $4T. So I guess one could say there isn't much left in the accelerator pedal if we need it again. Especially given the recent tax reductions while the economy was already improving. That's just one less tool that can be used for the next time. Hopefully we won't have a next time until the Fed is able to get rates over 5% and the Fed balance sheet under $1T. https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
From a feedback control perspective, it amounts to trying to balance an inherently unstable system. Think of a cart-and-pole apparatus where the top end of the "pole" (that is, the natural rate) is constantly being pushed around by unpredictable, outside shocks, and you have to move the "cart" (the policy rate) in the same direction to make up for those and keep the whole thing from falling over (into hyperinflation or extreme deflation - an illusory "boom" or a very real and persistent "bust"). The zero bound is only a leftwards boundary for the "cart", not the "pole" - but when it's hit, you do need something like QE to push the top end of the "pole" rightwards again independently of the "cart".
(The way out of the mess is to stop trying to use monetary policy to manipulate market interest rates, and to instead shift to a short-term policy target that fosters stability rather than instability. Such as, e.g. the money-price of gold. Or some measure of the money supply. Or the market forecast of nominal incomes x months in the future. There are lots of plausible choices!)
I'm waiting for an electric Toyota Tacoma. Meanwhile, I drive a Civic. It's not too bad, but it only gets 34.2 mpg (long term average) with 80% highway driving. I may need to review my driving habits though. I got used to 51 mpg with my Jetta TDI but they were cheating of course.
I bet those would fly off the lots and into driveways in nice neighborhoods as fast as Toyota can make them. A hybrid Tacoma would have all the "I'm handy, but not some hick that drives a full-size" implication of a new Tacoma with the implied environmentalism of a Prius.
I'm not saying this applies to you personally BTW, just that the "image" a hybrid Tacoma projects would subconsciously seal the deal for a lot of buyers.
Apparently the president of the SIPC stated that Robinhood didn't contact the SIPC before making their announcement. The SIPC president Stephen Harbeck is on record saying that "SIPC protects cash that is deposited with a brokerage firm for one limited purpose... the purpose of purchasing securities. Cash deposited for other reasons would not be protected. SIPC does not protect checking and savings accounts since the money has not been deposited for a protected purpose."
He later stated that the SEC would need to take the lead on clarifying the matter though.
I have a one-year emergency fund with Robinhood that is invested in index funds (secondary emergency fund as the primary emergency fund is in cash). I think I'll keep my primary emergency fund in the PNC high yield savings account for now until all that gets worked out.
I've been listening to How I Built That with Guy Raz lately too. Also a good podcast. I spend a lot of time in my car so good podcasts help keep my sanity.
