| What I've found interesting this year is the response of the "average" US person to inflation - by which I mean somewhere between panic and grave concern. Whereas where I live inflation has been in the 3-6% band, give or take a bit, my whole life. At the moment it's near the top of that band. And to be clear people here have complained about it my whole life too. But inflation has 2 interesting attributes. It devalues savings (so instead encourages either plain spending or asset-other-than-cash accumulation, and it also devalues loans. In other words it intrinsically encourages things like home-buying, (mortgages can be used here as savings accounts as a store for savings, thus saving interest and offering effective rates same as your mortgage). Hyperinflation is bad, but we're not talking about that. And if you are on a fixed value pension then sure, it's getting smaller. (hint: avoid fixed value pensions, that always ends up being worse than you think.) In short inflation is not good or bad, it's just a part of life that offers a bunch of upside for those that keep their eyes open. |