Wealthy Inflation

The wealthy might earn a lot (usually in the form of interest and capital gains rather than wages and salary), but they also pay a lot. They pay a lot for housing and food, as well as all the luxury items and toys they have. For example, the wealthy who live in Manhattan are paying increasingly higher prices for apartments and condos: this New York Post article says that apartment prices have risen by 20% in the last year. The average Manhattan apartment costs $1.7million these days, and real estate agents expect that price to rise.
Recent auctions of rare automobiles show that the cars rich people like to have in their garages are getting more and more expensive. The Knight Frank Luxury Investment Index (KFLII) of classic car prices has risen an average of 43% per year over the last ten years. The same company’s indexes for wine and fine art have risen an average of 18% each year for the last ten years. (The only good news is that the average price for antique furniture has fallen 19% over the last ten years.)
Even though the 1%ers are very wealthy, and they do save more than their less wealthy brethren, they also spend a lot of money (such conspicuous consumption is on display in reality cable shows such as Keeping Up With the Kardashians.) Maybe it’s not a big problem that what they buy costs a small fortune…