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> in a broad-sweeping financial collapse, then "cash in savings" would be equally worthless. > how would "cash in savings" be equally worthless? Maybe I'm not
by scott_karana 11y ago
> in a broad-sweeping financial collapse, then "cash in savings" would be equally worthless.
> how would "cash in savings" be equally worthless? Maybe I'm not understanding, but it's pretty difficult to actually lose money in a savings account, that's the whole point.
The cash wouldn't be lost, but it would have reduced purchasing power in a recession. And if inflation is steep, you're actively "losing" money.
It would be "worthless" in the context of long-term investing, because nothing would have long-term worth.
- antientropic 11y agoWhy would the cash have reduced purchasing power in a recession? Sure, that would be the case if there was high inflation, but that certainly wasn't the case with the 2008 crisis.
- mywittyname 11y agoYou have that backwards, during a recession Cash is King. $10,000 in summer 2009 bought you a hell of a lot more of practically anything than the same amount a year previously. People with cash on hand in 2009 made out like bandits. Cheap stocks, cheap houses, cheap cars. Everything was cheap, cheap, cheap.