Am I Having a Saturday Morning Stupid Moment?

Depends. If you've converted and stored your material wealth in the form of currency, diluting the currency dilutes your wealth.

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation." -- Vladimir Ilyich Lenin

Inflation is an efficient way to spread the wealth, since it only robs those who have it.

Cheers, James Arthur

There are some bargains to be had in the stock market. Problem is, who can be trusted? In the good old days one could look at capitalization and P/E. Those good old days kind of ended a few years ago with the creation of creative financial tricks that were then again leveraged ...

Sometimes we visit places like that, where most tenants are on welfare, mostly for church-related work. To me most of those places look quite dilapidated within a very short time. In some, I don't want to have to show up at night around that area.

It also punishes those to hang onto cash and cash-like instruments, which I believe to be a quite intentional part of the system (since depreciation of currency is world-wide and crosses all political boundaries).

Yes. Wealth is power, and government is jealous of all other power. Inflation levels the population and removes options.

Now is the time to spend any loose cash on real estate or product development.

John

Right--inflation also encourages people to spend. It's the perfect stimulus package!

Cheers, James Arthur

It is quite intentional.

Developed economies are dependent upon money flowing rather than being hoarded. Inflation tilts the balance in favour of high-risk, high-return investments such as the technology sector. And also in favour of spending.

If the people with money are unwilling to spend it, the only way left for anyone else to survive is through subsistence agriculture. That tends not to provide a particularly good standard of living.

So you buy land, upgrade your home, or buy a second. I've been thinking about it but wanted to pay this mortgage off in four years. Maybe that's not such a good idea. Bux will become (a *lot*) cheaper.

Except they'll confiscate the results of your product development too.

Ever hear of "investing"? If people don't spend money they tend not to put it in mattresses.

Nothing quite like the exhilaration of paying off a mortgage with inflated bucks ;-)

...Jim Thompson

Let's see, 5-5/8% mortgage (before tax deduction) and 14% inflation[*], times $150K, hmm. Don't want to get stuck with the cash though.

That's an excellent point--borrowing is super-cheap right now. If you borrow now and pay it back over time, most of your payments will be with dollars worth less than today's. And mortgage rates are low.

PBS' News Hour in the background says the GAO estimates the Obama plan will add $9.3 terabuxs to the national debt over the next 10 years.

If that's not inflationary, I'm not sure what is.

James Arthur

Inflation usually means your income will rise in, at least, _numeric_ dollars. The note value of the mortgage doesn't, so you come out ahead.

...Jim Thompson

That's the only way I rationalized having to take a 10% mortgage during Carter's reign :-(

Here's an interesting article on Carter...

I think Obama is just a nutcase extremist reincarnation of Carter :-(

...Jim Thompson

I think after the Dow fell to almost half and so did their 401(k) accounts, many people will now be a bit gun-shy when it comes to investing.

Man, that was harsh. But true.

James Arthur

Indeed. Inflation makes putting money in mattresses an unwise choice, as it will effectively decay.

Exactly. However, in that scenario one doesn't want to hold onto cash, so where to put it? The mortgage was my plan (hence paying off a 15yr note in 4) but with 14% inflation that's not a good plan, rather, let Obamanomics pay it off for me.