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This is entirely incorrect and reinforces OPs point about the obsession of some people with the inflation boogie man.

• Geee 5y ago
  It's not a 'boogie man'. It's theft built into the system.
  • imtringued 5y ago
    There are three people in this fictional economy. You get a paycheck and you decide to save it. The other guy stays unemployed. 3 years later the second guy got hired by the third. You decide to spend your savings. The second guy says he already has a job, you should have asked while he was unemployed over the last 3 years. You raise your offered salary until he is willing to work part time for you. Bang, inflation. Therefore, "saving" is impossible. What really happens when you save your money is that you stopped consuming. There are products sitting on a store shelf that do not get purchased. If those products spoil then they are gone, not saved. If the vendor doesn't get customers then his shop will shut down and his labor will be wasted for those 3 years. You cannot get those 3 years back, ever. Saving is impossible full stop. However, investing is not. If you can invest your money and let that unemployed person build a house, that house will last 50 years and it will generate rental income and rent prices in the future are greater thanks to inflation, having a future income stream will defend against inflation. Edit: Deflation lets you pretend that the labor has not disappeared and therefore the second guy has to work twice as hard to catch up with his unemployed years all. To make things worse the person that decided to not spend their money caused his unemployment but still demands him to work twice as hard in the future.
    • Geee 5y ago
      I don't follow your logic at all. Prices are determined by supply and demand and have nothing to do with inflation or deflation. Without central bank control, there would be a natural balance of inflation / deflation. People would spend more when prices are low, which would cause prices to rise. People would save when prices are high, which would cause prices to decrease. This is a naturally self-correcting mechanism. Central bank induced inflation is caused by creating more money, and giving the money to those who spend it. It moves wealth away from those who are efficient, and giving it to those who are inefficient. This causes wasteful spending and misallocation of capital, and is harmful to economy and environment.
• premium-komodo 5y ago
  It's uncontroversial that upwards of 90% of the dollar's buying power has been lost due to inflation. Does that seem like a bogeyman to you?
  • Nursie 5y ago
    "X is not a store of value" "But the dollar..." The dollar is not a "store of value" either. It's a currency.