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re: Debunking wild conspiricies
Posted on 5/22/14 at 8:43 am to BennyAndTheInkJets
Posted on 5/22/14 at 8:43 am to BennyAndTheInkJets
quote:
Because distorting the economy is kind of the goal, they want stable prices, a stable financial system, low unemployment, etc..
There is no person or group with the correct information to adequately guess the 'correct' inflation rate in the universe. No more than I could tell you what small businesses will become the next big brand names.
quote:
For one they are not manipulating everything as you say,
Ever single person who does a transaction based in USD has been affected by these easy money policies.
In any case, diversifying out of USD is increasingly a good idea as the inflation rate makes saving increasingly a silly idea. Some people just don't know how to do math or how compounding 3%+ yearly inflation will rob them blind over their lifetime.
Posted on 5/22/14 at 8:53 am to MagicCityBlazer
quote:
There is no person or group with the correct information to adequately guess the 'correct' inflation rate in the universe. No more than I could tell you what small businesses will become the next big brand names.
It's not a "correct" inflation rate, it's just slow, steady inflation. They aren't trying to correctly guess the perfect level, they just have a target that they operate around based on historical precedents and current economic backdrop. I'm not saying the Fed is some all knowing perfect entity, but they are better than the alternative of no central bank which historical evidence supports.
quote:
In any case, diversifying out of USD is increasingly a good idea as the inflation rate makes saving increasingly a silly idea. Some people just don't know how to do math or how compounding 3%+ yearly inflation will rob them blind over their lifetime.
You're looking at things in a vacuum. You have to look at wage growth, investment returns, not to mention every other countries' inflation rates. The analogy I always use is picking up a girl at a bar has little to do with how handsome and charming you are, it has everything to do with how handsome and charming you are compared to every other dude in that bar. That's why I encourage you to look at the DXY over time. Just compounding 3% (which we haven't touched in years) over time assumes WAY too much and simplifies WAY pasts the point of convoluting the actual outcome.
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