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New York + New York / USA
Posts: 76 since Jan 2020
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As you wish... but i have been listening and hearing chicken little now for half a century
they never seem to get that global wealth and wealth increase changes the whole pie... they often are people who ignore that the balloon is constantly inflating...
Real world GDP per capita 1900–2006 in dollars. Interpolated from data for 1900, 1913, 1940 and annual data after 1950.
the number is TRILLIONS... if it was just inflated prices, value carved up, it wouldn't look like that..
there wasnt 2 trillion in the world til about 1940... since 1980 4 trillion DOUBLED to 8 Trillion..
that means since i graduated high school, 8 trillion dollars were added to the GDP pool!!!!!!!!!!
it took all of human history up to about 1970 to make the first 4 trillion..
it took less than 100 years to double it...
here is an interesting chart to cause some thinking..
Communist states under perform despite some having well educated people (who over perform when they immigrate - see millionaire next door).
Russia basically makes its money from raw materials...
this is why its a major cause of the conflicts around the world... since 1917, they are behind most big ills.
sad but true... who took over when the friendship between germany circa 1940 and the Grand Mufti ended?
who funded the house of saud? who made lots of cash from the wars since WWII?
who has shipped tons and tons of material to africa which keeps ITS raw materials off the market?
who has a conflict going that is blocking major gas pipelines so that its gas is bought in the EU?
anyway.. that chart is not a product of inflation...
its a product of materials being used and value being added by humans to those materials
the reason the markets have not collapsed is that each year, more material is being added.
mining is the source of new money
(mostly.. which is why our left wants us not to do it! we are too wealthy for them)
the reason we have so much money in things without inflation is that there is a thing called liquidity..
money is a very liquid asset... and inflation happens when there isnt enough..
your looking at the pumping of cash into the world, and your thinking... more money chasing fixed assets
and they are noticing, the assets are increasing in value and mining supply is increasing faster than there are dollars and talents, and rubles to buy them!!!!!!
here... let me explain it this way..
we live in stagnant town... across the water of lake woebegon...
All the dollars in stagnant town add up to 1 million..
one day, someone notices a green rock and starts to dig..
and they find copper... suddenly there is twice as much copper in stagnant town
the same amount of money would now have to chase after more assets..
another place starts making copper cookware out of that new supply...
now the value of the metal has more value as a utensil... but alas, there is not enough cash
this leads to huge inflation... a town worth 1 million before, now is worth two million
and there is only 1 million pieces of paper to represent that... so the value inflates not deflates..
those with more cash, find themselves wealthier the more they sit on it, and the less they spend it!
what to do?
the next day they bump heads and say, lets print 1 million more pieces of paper..
now the value of the currency drops, but it more reflects the total amount of assets available
the wealthy find that if they sit on their cash, it will lose value and so go out to spend it on material
when they do, it circulates more, and so, more get some of it..
this is kind of what is going on...
by diluting the value of the cash, not inflating it, you force the wealthy to use it or lose it..
when they do this, more value gets made and more assets are found and more economy goes and goes
What Impact Does Inflation Have on the Dollar Value Today?
The impact inflation has on the time value of money is that it decreases the value of a dollar over time. The time value of money is a concept that describes how the money available to you today is worth more than the same amount of money at a future date.
This also assumes you do not invest the money available to you today in an equity security, a debt instrument, or an interest-bearing bank account. Essentially, if you have a dollar in your pocket today, that dollar’s worth, or value, will be lower less one year from today if you keep it in your pocket. Most people dont consider time value of money... they dont have enough to care... or arent savvy enough
But if you had a billion dollars, and you put it in a room, you would lose 30 million of buying power a year!!!
so rather than inflation being a bad thing... as it is for people with small amounts who find it hard to get more
on the global scale, its creating a force that moves the money out of the pockets of everyone and puts it to work
a person with 1 million in assets needs to earn an extra 30,000 to break even in buying power.
its a complicated thing... and not the same meaning to different people..
a person with 1000 dollars barely notices the loss of 30..
tons more... but i have trading software to design and make..
i need to make up a six figure loss or go homeless (again)
just note that if things collapse, where would that VALUE go?
but without inflation... why would a person risk a huge asset to invest?
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