International Man: As inflation accelerates and the US dollar drifts toward its intrinsic value, how does that enrich asset owners while eroding wage earners’ purchasing power?
Doug Casey: Inflation has always benefited rich asset owners at the expense of current earners. That’s true for several reasons.
First, the earners have to pay taxes on the money as it comes in, but asset owners don’t pay tax on the increase in value of their property until they sell. And then it’s at lower capital gains rates.
Second, even though earners typically don’t keep up with the rate of inflation, they’re constantly pushed into higher tax brackets as their wages…
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