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a small amount of inflation (2-3%) is generally seen as good and the target of reserve banks around the world... you think they have this target because inflati
by netpenthe 13y ago
a small amount of inflation (2-3%) is generally seen as good and the target of reserve banks around the world... you think they have this target because inflation is BAD?
inflation encourages investment (better invest to beat inflation)
deflation is bad unless you already have a lot of money. it discourages investment (why invest? i can just sit here and the value of my money goes up)
you can call inflation bad, but it is still better than the alternatives.
- nerfhammer 13y agonot just any kind of money -- cash. It's good if you have a lot of liquid assets laying around, neutral or bad for every other type of asset.
- thaumasiotes 13y agoHow is this a response to me? I just pointed out that deflation generally goes along with terrible circumstances. > deflation is bad unless you already have a lot of money. Deflation is bad even when you do already have a lot of money, for the reasons you describe. This is a good place for the argument "a rising tide lifts all boats".