The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Mechanical Investing

URL:  https://boards.fool.com/a-little-poison-inflation-is-a-good-thing-10900873.aspx

Subject:  A little poison (inflation) is a good thing? Date:  5/27/1999  9:01 PM
Author:  exmsftfool Number:  27121 of 282634

pikapp383
Hmmm, deflation means money now is worth more than money later.
A little bit of inflation is a good thing, it encourages investment.


No, deflation means money now is worth less than money later. That discourages debt, not investment.

A little bit of inflation is not a good thing. A little bit of deflation is a good thing. Most people tend to get slowly better off.

A lot of deflation hurts a lot, but if recognized the cure is much easier than it is to kill inflation.

Finally, steady inflation is economically a non-event, especially at low levels.

It is unexpected, inflation that can cause some beneficial effects. But it tends to be a one-time-shot until people catch on. That is why Keynes did not have a general theory like he claimed, but a specific one.
Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us