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0 pointsfluoridation14d ago0 comments

>The value of your savings is decreasing at a faster rate than ever before, so its a good time to stop saving and spend it?

Inflation does incentivize spending, yes. Would you rather have 100 kilos of rice today, or wait and have 99 kilos of rice tomorrow for the same price?

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jr359214d ago· 4 in thread

> Inflation does incentivize spending, yes.

All inflation incentivizes is finding an asset class that isn't devaluing. If that is what you mean by "spending" then we align. But does inflation incentivize spending money on depreciating assets? Only for fools.

inigyou14d ago

Everything depreciates in a long enough term. What would you rather own?

fragmede13d ago

Does it? Outside of a couple of rich island city-states, they're not making more land, so on a long enough timeline, that asset class is bound to go up eventually. Same with gold – there's a limited supply of it on Earth, so at some point we'll mine it all, and then what? The question is how assets perform on a given timeline, and how it does relative to inflation. I could guarantee you 1% a year returns if you give me money, but no one would do that because that's less than inflation, as well as a number of other classes of assets.

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fluoridationOP14d ago

??? "All" it incentivizes? Uh, no. The vast majority of people don't treat their salaries as an investment opportunity, they have to live off it. If you need to fix your water heater, you might get it fixed now while inflation is high than wait until winter (not a great example given the time scales involved, but it gets the point across). Even if you have nothing that you desperately need, if inflation is really high you might blow it on something frivolous because if you try saving it it won't be worth anything in one or two year's time.

Inflation doesn't push people towards non-devaluating assets, it pushes people to get rid of currency by any means they have available.

jr359214d ago

???

OBVIOUSLY if you absolutely HAVE to spend money because your life depends on it (ex: hot water) then you're going to be incentivized to spend it sooner rather than later in an inflationary market.

I'm referring to discretionary spending. Eating out. Buying a new laptop. Traveling. Etc.

This statement: "it pushes people to get rid of currency by any means they have available." is just flat out wrong. If you're draining your bank accounts on discretionary purchases right now, that's your mistake.

I would include retiring before you absolutely have to as "discretionary". Now is not the time to make a decision like that, when the alternative is a smarter financial decision (work, save, invest in assets that aren't devaluing at the same rate as currency).

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