What's wrong with Inflation? Its all relative isn't it?

tneig

Do all internal money systems have inflation? How much is normal? It appears all money systems are dynamic, not static (and have a life cycle). All of it is relative semi agreed upon barter systems, even gold and other PMs.

You either gain a bit of an edge, stay status quo, or slip behind. And if savy enough, see what else is coming. Overall most people live from paycheck to paycheck and don't notice it on a daily basis because they rotate the money quickly. It's when you stack it, you notice.

konsole

Inflation isnt a big deal if you don't save a single penny and your raises increase at the same percentage as inflation.

Inflation isnt 2% and I know I'm not getting a 10% raise each year

Coyn

Relative is the problem

all my relatives are broke.

roadrunner

Nothing is wrong with inflation as long as you're on the right side of the wealth redistribution.

PerryHall

What if you're on a fixed income like many retired americans?

AUandAG

Hey, if you are still working and your income rises proportionately, then all is well. IF you
are retired or on disability or such, it's a game changer and a killer.

bob

derryb

<< <i>What's wrong with Inflation? >>


Everything, it is an additional hidden tax on what you already paid income taxes on. It cuts into the value of what's left after you pay your taxes. Top that off with low interest rate earnings on what you have left and you have the recipe for going broke.

Think of it as the opposite of compound interest. Think of it as an automatic pay cut each year. If you're getting a raise (or cost of living allowance) you need to weigh the raise against the cost of inflation to really know if you actually got a raise or just a smaller pay cut.

Baley

If someone's life choices over several decades (or sudden bad luck) has left them so paralyzinglyh vulnerable to inflation, certainly that can't be 100% the Government's or the Economy's fault, or due to actions of the Banksters or Big Business, or Wall street, or various nefarious Others, can it?

surely the individual must bear some of the blame, and serve as cautionary tale for younger workers, savers, and investors?

jmski52

If someone's life choices over several decades (or sudden bad luck) has left them so paralyzinglyh vulnerable to inflation, certainly that can't be 100% the Government's or the Economy's fault, or due to actions of the Banksters or Big Business, or Wall street, or various nefarious Others, can it?

surely the individual must bear some of the blame, and serve as cautionary tale for younger workers, savers, and investors?

You seem to be suggesting that actions have consequences. In general, you would normally think that to be the case and that people learn from their experiences over time.

Unfortunately, it seems that the consequence of playing by the rules is to end up paying for the ones who get undeserved bailouts and constant freebies from the government which only creates the motivation for more and more of the same.

Baley

On that we agree, and it's infuriating. Incentives are upside down; and the system is Broke, both literally and figuratively.

but what's the alternative, if I still want to live as a Citizen of the USA and participate in American society?

derryb

<< <i>On that we agree, and it's infuriating. Incentives are upside down; and the system is Broke, both literally and figuratively.

but what's the alternative, if I still want to live as a Citizen of the USA and participate in American society? >>


Be prepared. When you are aware you can prepare.

EagleEye

I think if you know what the inflation rate is and have it factored into your finances, for example, pay increases if you are a salaried worker and cost and prices adjustments if you are a business owner, then it is not so much of a problem. The trouble is that over the past 20 years the Government has taken many of the basic inflation drivers out of the equation. Now we feel like we are not keeping up with inflation.

Inflation charts - real and imagined

roadrunner

but what's the alternative, if I still want to live as a Citizen of the USA and participate in American society?

We have the same 2 choices the Romans did when they went through similar inflations..........bread and circus. Currently, circus appears to be winning.

EagleEye

In 1980, a presidential election year, inflation reached 13.5 percent with unemployment at around 5.8 percent. A few years later, in 1982 there was a recession and unemployment shot up to 10.8% and inflation crashed down to 4%.

Now, we have 6% inflation (or 3% imagined - see my earlier post.) and 8.2% unemployment.

Which is better? Inflation or unemployment. Or maybe it should be which is better? Inflation or recession.


Unemployment rate

cohodk

With higher growth rates comes higher inflation. Always has been.

We've had unprecidented growth for 70 years and constant inflation without abate. Eventually this will give. Just ask Japan.