I am not sure I am buying Tom Woods' explanation of who benefits from inflation though. The main beneficiaries of inflation are not those who spend newly created money first. It is those who create the money out of nothing. They had nothing, they created money, they spent the money, or lent it out as the case is, and now they have wealth they did not have prior. The Greeks, in this case, are not the winners, the banks that create the money are.
For example, let's say a government contracts out the construction of a bridge. Let's say the government is the entity creating the money. The workers building the bridge get paychecks, their wages did not increase relative to workers building the house next store and they pay the same price for goods and services as the builders of the house. The bridge builders are not the winners, the new owner of the bridge is The losers were, all at once, any and all people who held the units of inflated currency, in direct proportion to the number of currency units they held. Each currency unit's value decreased by the rate of increase of the inflation. So if there were 100 currency units at the time the paychecks were spent, and there was 5 currency units dispersed, then each unit holder, at large, lost 5% of the value of his units.
I have heard Tom and RP talk about the people you spend newly created money first, but, either I cannot comprehend it or it's wrong.
Can anyone shed some light?
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