Quote from: Kyraishi on January 14, 2020, 11:37:19 PM

That's why inflation is considered by some as an invisible tax.

This is completely possible and evident in countries such as Zimbabwe, Germany in the past and countries like Venezuela now. Printing money to pay back old debt at the expense of fiat currency holders, specifically middle income earners is nothing new.

Why does it affect the middle class the most? The poorest hold little currency to begin with while the richest own factors of production, whose value will rise in nominal terms in line with inflation. That's also a reason why I think decentralized cryptos is a good hedge against this phenomena ever happening in your country.

In my opinion, inflation puts a relatively far greater burden on the poor than the middle class. Simply put the poor class has low purchasing power and usually, shopping is done for primary needs. With inflation, their purchasing power will decrease even more so if what rises is the price of food, the effect is certainly greater for the poor than inflation for non-food products.

The higher the inflation rate means the greater the rate of poverty. Inflation causes the real value of money held to go down. When prices increase, money to buy less (purchasing power goes down). people's purchasing power can be said to decrease if the income earned decreases or vice versa, the price of goods and services increases so that the ability to consume decreases. The decline in purchasing power has resulted in people becoming poorer than before.

Indeed the magnitude of the influence of the inflation rate in each economy class and in cities and villages is different. The classification of economy class is based on the amount of income and the effect of inflation is different in each class depending on the increase in expenditure. Inflation will increase spending on the poor class but will reduce spending on the upper class. Whereas the middle class does not immediately feel the effects of inflation, why?

The middle-class is concentrated in urban areas, the middle-class patterns of consumption are secondary and even tertiary needs, namely durable goods and services which tend to be prestige and comfort. So the expenditure of the middle class is not for basic needs so it will not be too influential.

The use of cryptocurrency, especially bitcoin is indeed a preventive measure to protect the value of your money before inflation occurs. The middle class is also starting to have an awareness to save and invest and the middle class is now a millennial generation who is certainly more understanding about the benefits of the digital economy.