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> How would you feel if the government told you, in this awful economy, that you had too much money sitting around and should try investing it in something ris
by cheald 11y ago
> How would you feel if the government told you, in this awful economy, that you had too much money sitting around and should try investing it in something risky or they would take it away from you?
It happens. That is, in fact, the explicit point of controlled inflation. The layman just doesn't realize it.
- eqdw 11y ago> It happens. That is, in fact, the explicit point of controlled inflation. Apple's cash is subject to the same effect
- cheald 11y agoNot likely, because Apple's cash is invested elsewhere - they almost certainly don't have a giant iMattress in the back that they're stuffing it into. The "cash equivalents" listed in their financials are things like t-bills and short-term bonds which are, by their nature, inflation-mitigating. You lose value on liquid cash sitting around in a checking account equivalent to the rate of inflation (less interest, which is negligible); companies like Apple know this and keep most of their liquidity in inflation-hedged instruments rather than in checking accounts.
- sp332 11y agoInflation is very low right now, so I guess the non-laymen aren't too worried about it.
- cheald 11y agoA 2-3% yearly loss in purchasing power adds up; at current inflation levels, $10,000 that sits in a checking account will be worth the equivalent of $8800 today in 5 years. Losing ~20% of your banked value per decade that it sits uninvested is substantial. It'll be worse if inflation is higher.