undefined | Better HN

0 pointsits_ethan3y ago0 comments

I think you might be confusing depreciation with deflation?

A $25,000 car becomes a $20,000 car the moment you drive it off the lot due to depreciation.

But the purchasing power of $25,000 cash becomes $26,500 after a year of 5% deflation, which means you _gained_ purchasing power by doing nothing (aka not spending money) as the result of deflation.

0 comments

2 comments · 2 top-level

nordsieck3y ago

I get that cars, phones and computers are verticals, whereas deflation is a general decrease in price levels.

But no, I don't mean depreciation.

A 2019 vehicle that sits on a dealer lot slowly loses value over time. That has nothing to do with depreciation and everything to do with newer, better vehicles coming out over time. The same thing applies to computers and phones.

zeckalpha3y ago

But if everyone sits on their cash, things slow to a halt.

j / k navigate · click thread line to collapse