Please help me to understand, why inflation is bad?

Just imagine if you lived in 1930, and fast forward to 2008. When you wake up in the morning, you were stunned that inflation went to to roof, 1000%. However, you also realize that have much better living standard, 2 or 3 cars in each family, and every car is much better than those made in 1930s, you heard about PC, internet, cell phone, many many more. Do you still care that you just had a 1000% inflation. Why does it r eally matter to you?
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Tell that to the guy who had $100,000 on his bank account in 1930.

Pretty pointless thread.
 
Quote from freewilly:

Why is inflation so bad?

Somehow I feel inflation is actually the only solution to pull us out of the mess.

From 1930 to now, what is the inflation? I am going to make it up here, so 10X (or 1000%). Just imagine if you lived in 1930, and fast forward to 2008. When you wake up in the morning, you were stunned that inflation went to to roof, 1000%. However, you also realize that have much better living standard, 2 or 3 cars in each family, and every car is much better than those made in 1930s, you heard about PC, internet, cell phone, many many more. Do you still care that you just had a 1000% inflation. Why does it r eally matter to you?

I mean, why everybody is so afraid of inflation? Sure everything will be more expensive, but do not forget you will get much fatter pay check as well. You will not lose your buying power.

We are having a huge housing bubble, and that housing bubble should create a big inflation, but we haven't seen it yet because people artificially keep it down. This is not healthy. A big housing bubble need a big infaltion.

Now, we have a big housing bubble. How are we going to solve the problem? One way is to let the housing price go down, but you know what that means, foreclosure goes to teh roof, and banks go bankuptcy, teh financial system collapsed.

Anther way is to create a big inflation. Everything goes up, including your pay check, but the housing prices remains the same. Then bank can still keep the money moving. Nobody is going to lose anything.
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I've kinda of wondered that too. In fact I was thinking that a great way to tax, would be just to print more money. It would be very cost efficient. It would bridge the gap between the rich & the poor... since rich people have more savings, and increase sending as the cost of holding is greater
 
In fact I was thinking that a great way to tax, would be just to print more money. It would be very cost efficient.
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LOL :) I hope you realise that politicians figured this out a long time ago ? That's what's been happening for quite some time man.
 
Quote from luckybastard:

Tell that to the guy who had $100,000 on his bank account in 1930.

Pretty pointless thread.
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he earned interest on that. the 'dollar value is .5 cents today' guys never mention that the money could have been invested
 
Thanks all for the reply. I have been busy this weekend. Sorry about late response.

Well, I agree with one follow up posts. Inflation is good for people who has debt and bad for people who has money. That's about it.

If we allow a huge inflation, we basically wipe out all we did in the past and start over again. Well, in the past few years, we are doing too well, why don't inject a huge inflation and let us start over again?

I believe at this point, lot more people has debt than fortune. The financial system is broken, money is not moving. Inflation is the only way to solve this problem, IMHO.

Freewilly
 
Quote from freewilly:

Thanks all for the reply. I have been busy this weekend. Sorry about late response.

Well, I agree with one follow up posts. Inflation is good for people who has debt and bad for people who has money. That's about it.

If we allow a huge inflation, we basically wipe out all we did in the past and start over again. Well, in the past few years, we are doing too well, why don't inject a huge inflation and let us start over again?

I believe at this point, lot more people has debt than fortune. The financial system is broken, money is not moving. Inflation is the only way to solve this problem, IMHO.

Freewilly
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You solve the problem with time. All the excesses are brought back in to balance and then demand begins to pick up. Inflation is nothing more than a tax. Sooner or later the govt will rev up the inflation tax on the unsuspecting public.
 
Quote from freewilly:

Thanks all for the reply. I have been busy this weekend. Sorry about late response.

Well, I agree with one follow up posts. Inflation is good for people who has debt and bad for people who has money. That's about it.

If we allow a huge inflation, we basically wipe out all we did in the past and start over again. Well, in the past few years, we are doing too well, why don't inject a huge inflation and let us start over again?

I believe at this point, lot more people has debt than fortune. The financial system is broken, money is not moving. Inflation is the only way to solve this problem, IMHO.

Freewilly
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Freewilly,

You ignore millions of seniors and others that inflation will put in poverty. Many can't start over at this point. Many are not young and penniless. You have a rather selfish and self-serving point of view - but then again, most people do.:p

When you form your views you may want to take a giant step outside your mind and think of others.
 
Quote from donnap:

Freewilly,

You ignore millions of seniors and others that inflation will put in poverty. Many can't start over at this point. Many are not young and penniless. You have a rather selfish and self-serving point of view - but then again, most people do.:p

When you form your views you may want to take a giant step outside your mind and think of others.
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Baby boomers created many of these problems. Did they not? If they retire penniless, they have nobody to blame but themselves.

They mortgaged the futures of their grandchildren, great grandchildren, and possibly their great great grandchildren. Assuming this country even survives that long.

When you create a monster, don't get upset when it eats the village.
 
Well, I am doing fairly well right now. I would lose quite a bit if inflation goes up. So calling me selfish is probably not right.

You are right though, I am still young. i can afford starting over.
 
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