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I find it interesting that when the cost of goods such as food and gas go up, it's called inflation, but when the price of assets go up, it's called a bubble. S
by bsbechtel 11y ago
I find it interesting that when the cost of goods such as food and gas go up, it's called inflation, but when the price of assets go up, it's called a bubble. Sure, there are differences (a bubble assumes the price will go back down), but it's still interesting to me....both are driven by the same thing, the price of money.
- sukulaku 11y agoI was using the word in an imprecise way. You could say "price inflation" and mean rising prices, or you could say "inflation" and mean an increase in the money supply. The price of money is the interest rate for borrowing it, but "inflation" in general refers to a decrease in purchasing power (through an increase in the money supply).
- bsbechtel 11y agoMy comment was more of a general observation of terms applied to different asset classes, not particular to your comment. Thank you for the clarifications though :-)