>You're also forgetting that inflation doesn't just affect assets, it also affects living necessities (and that's how it's defined in fact), so it's unclear how this is a net gain for asset holders.
Because the rate of increase of asset prices is quicker than that of other prices, namely labor. Hence the griping by young people about wages not keeping up with costs over the past many decades.
Again, it’s not all old people, but a significant proportion are going to be pissed if their 401k show declines or even stagnation at this point. You can even include soon to be old people here, the 50+ year olds that are invested.
> Because the rate of increase of asset prices is quicker than that of other prices, namely labor.
This totally depends on the asset and is nowhere near as straightforward as you make it seem.
For example, companies who mainly sell to consumers and require constant capex will generally be negatively impacted by inflation.
Your idea that the government will hold up the stock market just doesn't up to historical data.
2020 was the big exception (and the most recent in memory, hence why you and others are so focused on it) but the inflation that caused has lead to economic hardship across the board.
I agree with you that there's a political force trying to prop up the US stock market, but I'm not sure it's as simple as "old people and their 401k's!"
Push comes to shove, the only question about whether or not a bailout will happen (since there is no technical hurdle to issuing more money, just changing numbers in a database) is are the parties receiving a bailout sufficiently influential.
And I argue that people exposed to SP500, whether it be by holding it directly or facing the prospects of higher taxes because the government pension fund holding SP500 is not meeting its returns, are now sufficiently influential that it is a given that leaders won’t allow the broad market to be negative for more than a couple years.
2020 isn’t even the most recent one. Here’s a multi employer pension fund bailout from Mar 2021:
Because the rate of increase of asset prices is quicker than that of other prices, namely labor. Hence the griping by young people about wages not keeping up with costs over the past many decades.
Again, it’s not all old people, but a significant proportion are going to be pissed if their 401k show declines or even stagnation at this point. You can even include soon to be old people here, the 50+ year olds that are invested.