Message:

<p>[QUOTE=&quot;fatima, post: 1400791, member: 22143&quot;]It was you who said that inflation helps borrowers.&nbsp; This is how this conversation started.&nbsp; Now you have defined inflation as the cost of X goods at some point in the future.&nbsp; Nothing more and nothing less.&nbsp;&nbsp; However borrowers have to pay interest (unless you are a bankster)&nbsp; </p><p><br /></p><p>So in your example, lets say a party borrowed $1000 to buy that basket of goods now.&nbsp; In one year they sell the basket of goods for $1050, repay the $1000, and they made $50.&nbsp;&nbsp; So by your theory and definition of inflation, it&#039;s good for the savvy investor.&nbsp; However, what you absolute miss and what I mentioned above, is the interest rate on the $1000.&nbsp;&nbsp; If it is 10% then at the end of the year, the savvy investor turns out to be, not so savvy.&nbsp; He owes $50.&nbsp;&nbsp; It&#039;s absolute proof, using your own example, the fallacy of the statement &quot;inflation is good for investors&quot;.&nbsp; You have to consider other factors. </p><p><br /></p><p>So then you say in response to this.&nbsp;&nbsp; &quot;....but, fatima,&nbsp; no bank could get away with charging that much interest.&nbsp; It doesn&#039;t reflect the &quot;real world&quot;.&nbsp;&nbsp; Indeed.&nbsp;&nbsp; Yet your example claims that inflation can only be determined by looking at the future so how does the bankster know how much to charge in interest?&nbsp; Do they have a secret crystal ball?&nbsp; In other words, your definition is&nbsp; just as much a fallacy.&nbsp;&nbsp; Hence, your statement that inflation is the amount that something will cost in the future, is wrong.&nbsp; The finance system doesn&#039;t work that way.&nbsp;&nbsp; </p><p><br /></p><p>There isn&#039;t anything ivory tower about this.&nbsp;&nbsp; Inflation is an expansion of the money supply, beyond, as Cloud correctly points out, the demand for money.&nbsp; &nbsp; How this affects the real world is complex and can&#039;t be meaningfully defined by simple statements.&nbsp; This is what gets investors, including bullion buyers, into lots of trouble.&nbsp; There is vast inflation taking place, but via endless schemes the effects of it are being temporarily mitigated for most people here in the USA.&nbsp;&nbsp; It&#039;s good to have the currency the rest of the world must use to purchase oil.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in