> It means the people who save by depositing cash in the bank lose value over time, causing them to purchase investments out of necessity.
Ah you get it. That's the idea. Buy gold if you want, buy real estate, buy annuities, buy fixed incomes, I don't care, but money is an intermediary - not a long-term store of value. If you treat it as one you'll have a bad time. Just like if you treated your car as a boat. It'll work for a bit, then it'll sink. Because it's the wrong tool for the job.
> Those are nominal returns, not real returns. Inflation generates no real returns.
Did I say inflation generated returns? No, I said it sets the benchmark rate of return for your investments. If your investments fail to exceed inflation they're not the right choice. That's your duty in a capitalist society - to pick winners by investment.
> Nice rhetorical judo, to frame the central bank’s actions as normal and the lack of an increase as a decrease.
They're paying you less value so it's a decrease. You're tripping yourself up focusing on units instead of what they represent. After all, inflation has many positives, too.
> Alas, if congress could lower the minimum wage without political fallout, economists might suggest they do that instead of inflating the money supply.
That's between you and congress, not between you and Janet Yellen.
> This is why time preference should be taught in school.
I'd argue this conversation is why ECON 101 should be mandatory, so folks have the tools they need to thrive in modern society instead of, well, tilting at windmills.
Ah you get it. That's the idea. Buy gold if you want, buy real estate, buy annuities, buy fixed incomes, I don't care, but money is an intermediary - not a long-term store of value. If you treat it as one you'll have a bad time. Just like if you treated your car as a boat. It'll work for a bit, then it'll sink. Because it's the wrong tool for the job.
> Those are nominal returns, not real returns. Inflation generates no real returns.
Did I say inflation generated returns? No, I said it sets the benchmark rate of return for your investments. If your investments fail to exceed inflation they're not the right choice. That's your duty in a capitalist society - to pick winners by investment.
> Nice rhetorical judo, to frame the central bank’s actions as normal and the lack of an increase as a decrease.
They're paying you less value so it's a decrease. You're tripping yourself up focusing on units instead of what they represent. After all, inflation has many positives, too.
> Alas, if congress could lower the minimum wage without political fallout, economists might suggest they do that instead of inflating the money supply.
That's between you and congress, not between you and Janet Yellen.
> This is why time preference should be taught in school.
I'd argue this conversation is why ECON 101 should be mandatory, so folks have the tools they need to thrive in modern society instead of, well, tilting at windmills.