How the economic cycle creates inequality by design
An op-ed on the vicious ‘cycle’ of inequality.
Poorer individuals in the population own cash and their major, and really only asset. Richer individuals own assets beyond cash.
In an expansion, asset values increase with increased borrowing and general abundancy. More people can afford things, so prices for all assets go up. Richer individuals who own assets see boosts in their worth.
When inflation and frends come around, the party ends, value of cash is compressed due to inflation, SInce debt is too high and scarcity ensues, general worth of most assets declines too.
The ssmotic relative flow of value, that is, only to the richer, and never back, continues to worse the inequality situation, and forth rolls the ball. A wrecking ball, back and forth.
Disclaimer: This is an opinion piece by Michael Tendo. As such, we do not claim to have taken all statements through the scientific process, and the writer bears custodianship of their assertions.