Wage Inflation IS Inflationary

I saw a Wall Street journalist speaking yesterday, in which he said everybody with inflation fears had it all wrong. He explained it something like this:

It doesn't matter if prices are going up as long as wages are going up. If you have more in your pocket, you can afford the higher prices. That's not real inflation and it won't hurt the economy.

Which is about the dumbest thing I've heard from a Wall Street analyst since they were all claiming there wasn't a housing bubble. Prices and wages going up are the definition of inflation. When you get hyper-inflation, with prices going up 100% or more a year (often in regulated economies), the wages of workers rise more or less in lock step. People who don't have any assets are immune to inflationary pressures as long as they keep their jobs, hardly a certainty.

The people who get screwed by inflation are the people who have savings or have invested in debt denominated in the currency of the country. Eventually, inflation is the most likely way our government will pay back foreign investors who have been buying our debt and enabling our bubbles. That works fine to get out of the current cycle, but nobody will be in a hurry to lend America money ten years from now, unless they can get a heck of a good discount on the debt. I guess the moral of the story is I never should have started saving for a house, better to just spend the money on toys and wait for the inevitable Socialism to set in.