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> Inflation is insipid. You _must_ take risk with your funds just to not lose the value of it. This certainly seems to be the case, but it's fustrating. I can
by simplestats 5y ago
> Inflation is insipid. You _must_ take risk with your funds just to not lose the value of it.
This certainly seems to be the case, but it's fustrating. I can think of no fundamental reason why it should be so. Other than speculators and govt policies backfiring to destroy the safety of alternative places to keep your money besides cash.
- reedjosh 5y agoCouldn't agree more! Then add to that the fact that you're taxed on `gains` for investment. So buy an ounce of gold. 1 year later sell it for 6% more than you paid. Cool, beat inflation right? Well, no because now you pay capital gains on something that isn't really worth more than when you bought it. Inflation _is_ a tax... > govt policies backfiring Yeah sure, they're `backfiring`...
- simplestats 5y agoI was being a little generous, yes. I wonder if that's what is triggering people. The stated goal of govt seems to be low (but positive) levels of inflation and high growth. The current situation with high inflation and low interest rates makes even tax-free govt bonds undesirable. And they will need to raise rates. So I'd say policies are backfiring, yes.
- reedjosh 5y agoYeah, I don't get the downvotes. It's worse that they won't reply why either. At least converse when you are in disagreement. > The stated goal of govt seems to be low (but positive) levels of inflation and high growth. Yes, and I disagree with that position too, but people are taught Keynesian economics, so even beginning to unfurl that mess is asking for a downvote storm. The same people that will argue inflation is beneficial for growth tend to believe they are also open minded, free thinking, and well `educated`. It makes for a difficult argument often resulting in a lot of pointing to `authorities` on the matter.
- xxpor 5y agoThere's nothing nefarious about it. The government doesn't want people hoarding cash, because it means the money isn't supporting the economy.
- hkt 5y agoNot to mention the dramatic effects of deflation on growth.
- creato 5y agoI think it's weird that people expect to just be able to just watch a pile of cash and have it maintain value indefinitely (or even grow in value). Every other resource you could trade for that money would decay over time.
- hackerfromthefu 5y agoThe buying power of your cash is surely decaying over time.
- creato 5y agoYes, as would anything else. That's the point.
- reedjosh 5y agoWell, real estate, gold, and bitcoin don't.
- simplestats 5y agogovt bonds aren't generally expected to decay over time either. But I suppose they are these days.
- simplestats 5y agoAh. No that's not what I meant. Option #1 is risk the money. Option #2 is sit on cash. You forgot about option #3: invest it somewhere that is both not risky and safe from inflation. Institutional investors have hedging strategies that achieve this. For us little people, there used to be crappy govt bonds that would safely give you the inflation rate more or less. Now they give you negative returns while inflation climbs. And of course the traditional hedges like real estate and precious metals are sky-high and dominated by speculators.