Wage stagnation over decades

[Jeff Maginty]

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[TimberWolf]

Inflation is irrelevant in this case.

Banks made good money when margins on mortages were like 1% (5% rates - 6% mortage), now their margins are MUCH higher - 0.5% rates, but mortages I think 3-4% at lest.

Why is inflation irrelevant if mortgage repayments are reducing in real terms due to inflation? If banks are lending out at say 3% or 4% and the real value of repayments are decreasing due to inflation (between 5% and a zillion%), it seems like they are losing money.

[AtW]

Why is inflation irrelevant

It's irrelevant because bank itself (not its staff) does not consume food, oil etc - they are not manufacturer whose cost structure directly depends on stuff that goes up in price: if anything this is good for bank when assets or collateral they have like houses inflate in price.