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0 pointshugh410y ago0 comments

Inflation of zero is just as good for encouraging spending as small positive inflation -- the rate you'll get by low-risk investing will always beat inflation by a bit.

But the moment inflation dips below zero it really starts discouraging spending.

So I suspect it's about having a margin for error. Target zero and it will spend a lot of time negative, target mildly positive and it will spend most of its time mildly positive.

0 comments

ancap10y ago

>But the moment inflation dips below zero it really starts discouraging spending.

While this view is common, it is incorrect.

This is obviously evident when you consider the price of computers and other tech products over the decades.

AnimalMuppet10y ago

Even in computers, you had the dilemma of "should I buy now, or wait a year and get the same thing for less money?" That was a standard question for many years.

ancap10y ago

Despite that, companies like Apple have hundreds of billions in revenues. Which is to say, the falling prices aren't a real problem. After all, the same person could say they could get the same thing for even cheaper in 2 years, 3 years, 5 years or 10 years.

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mizzao10y ago

The price of computers dropped because of returns to technology investment, not because of deflation.

ancap10y ago

Why the prices dropped is irrelevant. Clearly spending on tech products has not ceased.

j / k navigate · click thread line to collapse

0 pointshugh410y ago0 comments

Inflation of zero is just as good for encouraging spending as small positive inflation -- the rate you'll get by low-risk investing will always beat inflation by a bit.

But the moment inflation dips below zero it really starts discouraging spending.

So I suspect it's about having a margin for error. Target zero and it will spend a lot of time negative, target mildly positive and it will spend most of its time mildly positive.

0 comments

ancap10y ago

>But the moment inflation dips below zero it really starts discouraging spending.

While this view is common, it is incorrect.

This is obviously evident when you consider the price of computers and other tech products over the decades.

AnimalMuppet10y ago

Even in computers, you had the dilemma of "should I buy now, or wait a year and get the same thing for less money?" That was a standard question for many years.

ancap10y ago

1 more reply

mizzao10y ago

The price of computers dropped because of returns to technology investment, not because of deflation.

ancap10y ago

Why the prices dropped is irrelevant. Clearly spending on tech products has not ceased.

j / k navigate · click thread line to collapse