* Part 1

New wealth is being created all the time by the fusion of labour and capital. There is a bit of a balance of how it is distributed - most of it goes to capitalists and some of it goes to labourers (labour labours, spends what they feel is necessary then buys capital with the rest. Over time they become wealthy capitalists too and we all get to be rich. In theory, a lot of people just waste the opportunity even under the best of conditions :[ ).

Over a long enough time frame money printing does nothing, but in the short term there is an effect where the first people to get the money benefit from distortions where they get more short term economic power (in the US typically bondholders, I suspect there are also programs of interference in stocks [0] although that is more of a theory).

I argue that when new capital is created, under a free market more of it should be going to people who draw wages. If I was right, I'd expect symptoms under the current system like people struggling to save, struggling to afford homes, etc, moreso than in the past. People being unable to transition smoothly from being labourers to capitalists and the middle class slowly shrinking.

The way the accounting identities shake out, I'd expect to see exponential increases in every price and valuation but consumables would rise slightly faster than wages and it'd become less and less effective to people relying on their labour to save.

* Part 2

But there are also secondary effects - because now "being an asset owner" is unfairly rewarded, people start creating fake assets in the hope of getting in front of the money hose [1]. That leads to misallocation of capital which IMO is likely to lead to major losses. If capitalists are incentivesed to own assets in the abstract rather than own assets that are actually productive then eventually the system has to recognise big losses because allocations aren't performing.

To give a specific example of that, if you happen to own gold the market is signalling that you have been making consistent "real" (ie, in excess of CPI) returns for something like 20 years. That is obvious bunk, gold is a dead asset that does nothing - the real price might jump up and down a bit in a band, but it doesn't climb steadily at that rate. I'm being asked to pretend I'm getting wealthier each year through my gold holdings, and a lot of people aren't switched on enough to realise that is a fake signal. The market is encouraging unproductive allocations because the metrics are being cooked. And the metrics are being cooked [2] likely on purpose - because it is in the interests of nobody powerful to stop printing money and let labour draw a bigger share of the wealth. Good metrics would suggest that as the obvious thing to do.

> Who got poorer?

Anyone who earns by them working. Especially people who try to retire.

The long story short here is the economic system is overly rewarding people who own assets, encouraging people to invest in bad assets and none of monkeying around with price levels is helpful. It just makes it harder to figure out what is going on.

[0] https://en.wikipedia.org/wiki/Working_Group_on_Financial_Mar...

[1] I'm basically in on this, I don't mind too much about whether my investments actually have good fundamentals because I'm looking to get in on the money printing. It has worked out great for me if you believe the CPI is important. Acceptable after doing normalisation against the M2.

[2] Totally different topic that I'm only alluding to here. Economics favours long blog posts or books, HN isn't really wordy enough to have a satisfying argument.