If everyone's bank account balance goes up by 50% uniformly, lets say one person has 100,000 and another has 10,000. After the increase they now have 150,000 and 15,000 respectively. But the low end item costs also go up due to inflation, so food now costs 50% more lets say. The thinking is that this eats into the lower bracket much more than the higher one. So inflation would increase the divide between rich and poor. I think this makes sense, interested if I am wrong here please let me know your thoughts!
I don't think so. Both still have the same percentage of the money, so it should be even.
If a rich person thinks inflation is coming they can buy fixed assets, invest in resource companies, invest in companies that provide critical services (food supply, communications, etc.).
The problem for the poor is that it's hard to invest in things that benefit from inflation, especially if you don't have any money to invest. It's unlikely the paycheck-to-paycheck wages of poor people are going to go up enough to cover any kind of increase in (ex:) housing prices.
Or you have people like my parents whose (defined benefit) pensions aren't going to do well against inflation. They'll get to watch the value of their retirement income drop like a rock at the same time they've seen millionaires with "small" businesses pocket hundreds of thousands of "bailout" dollars they didn't really need.
Those millionaires will be the ones creating inflation by buying up fixed assets with their free government money. My parents will at least benefit from increased value in their house. Me and the generations after me that can't afford houses and don't have many fixed assets will get screwed really badly.
I can see it coming and there's not much I can do for myself :-(
