What does infaltion really hurt though. For the most part, a wise investor is protected from inflation.
Alas - a reasoned view (though one I don't entirely agree with) - this thread was getting a little stale with a technician and a state school grad (I kid I kid, I have many friends in the Berkeley econ faculty).
Not really. Seems like it for a while, then ultimately accelerates away leaving almost investors in the dust. The BIG problem comes when the currency gets slammed. When the currency loses 90-99% of its value, it doesn't matter how much "money" you have accumulated. It's all pretty much worthless.
Reading your thoughts is enough to make me wonder how you ever think people would trust you with trading or adivising how to trade their money. But of course, your 5 week track record is probably enough.
I agree with you 99% of the time, and I think you are a wise trader, but I disagree with you here. People here can't say that inflation hurts investment value, and then in the next breath say that the DOW will hit 100,000 because of inflation. The only people hurt by US inflation are importers, and people who are no longer working who's money is under the matress (or somewhere else that grows slower than inflation). The working class for the most part don't even notice inflation as wages increase in tandem.
Ahh... see - the skills needed to open a trading account and be a "stock/forex/futures/options trader" are: (1) be able to read and write, (2) can add a few numbers together - not necessarily correctly, (3) can tell the difference between a blue line and a red line. God bless their hearts.
Working class wages do not keep with inflation Note: Wall Streeters are not 'working class' they are paper pushers
Yes and no. Repealing the gold backing of the $USD could have been a PROPER facilitator of commerce had it not been abused by the Gummint and its cronies. About 25 years ago on Wall Street Week, Ruky had Milton Friedman as a guest. Ruky asked, "What should be done with the Fed?" Friedman, "It should be abolished....Then replaced with a computer which expanded the money supply by the rate of population growth, about 2% per year... and let capitalism be capitalism." (I know this to be true because I watched it.) That would have been the best of both worlds. Though the currency would still be Federal Reserve Notes, the buying power of the $USD would have been maintained... and commerce would have been accommodated. They DIDN'T do that. Why? Who benefited? Who was harmed? Answer those questions and you will understand "The Fed".
Not true. I recently heard from a grocery check-out person, "food's going up like crazy, but my wages are not keeping up." Inflation is the DEVIL. Debasing the currency/inflation is one of the WORST possible afflictions a government can impose on its people... and history tells us "that's business as usual". Ask yourself "WHY is it business as usual?". Figure that out and you will understand perhaps THE most important fact of modern economics.
Wait a second - there's no inflation on gold standard? I seem to remember the spaniards had a little problem with that when a lot of gold was discovered.... Moreover, inflation isn't fun - but neither is deflation. Some might argue that deflation is worse (think Japan - inflation can be combated with raising rates, deflation is much much harder to fight). Gold standard makes it a bit easier to slip into deflation than fiat money. Oh, and on the point of fractional reserve - all the Fed does is regulate fractional reserve requirements. Fractional reserve banking has been around for as long as banks have been around. The Mediccis were practicing fractional reserve lending since its earlier banking operations. Sort of required to make the whole thing work. Wait - I'm supposed to be reading more history right?