UnThreaded | Threaded | Whole Thread (60) | Ignore Thread Prev | Next
Author: WendyBG Big gold star, 5000 posts Top Favorite Fools 10+ Year Anniversary! Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35643  
Subject: Re: "Long Bond" - buying and rolling Date: 2/12/2006 6:07 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
<Deflation destroys wealth>

Actually, deflation increases the value of cash. During the Great Depression, anyone with cash saw their purchasing power increase. My grandmother told me that land and property were cheap, and she wished she could have bought...but she was short of cash, as were the desperate sellers.

It is inflation that destroys savers, by eroding the value of every saved dollar.

Deflation may be said to destroy wealth, if one's wealth is in assets whose value is dropping. However, if your house value is dropping, so is everyone else's...so the exchange value doesn't change.

Deflation also makes it difficult for businesses to prosper, since buyers hold off purchases, waiting for prices to drop.

< and erodes the ability of the government to levy taxes. No government purposely enters a deflationary period. The goal is measured inflation.>

Yes, we agree on this.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (60) | Ignore Thread Prev | Next


Foolanthropy 2015!
Fistula Foundation: A World of Good!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.