[Pops]

$this->bbcode_second_pass_quote('', 'A') central idea is negative interest (also known as demurrage), which discourages accumulation, allows money to circulate in the absence of growth, and encourages long-term thinking.

[Sys1]

We have passed peak oil, so we will statistically be poorer and poorer.
If it's inflation, it means we'll still have a job, but it won't pay as much as before. And will pay less and less.
If it's deflation, it means some people will be incredibly rich while most of citizens will be jobless.

Inflation is communism, deflation is capitalism.

[PrestonSturges]

Without any inflation, you fall into a "liquidity trap." Krugmann wrote an article years ago about Japan's Lost Decade. The government has no ability to stimulate the economy and cash is the ultimate investment. Capital no longer flows for investments, only games that destroy trillions of equity so a handful of people can skim commissions and fees. This shrinkage due to equity destruction only makes the remaining cash more valuable. Without inflation, growth can drop to zero unless there is a game changing technology that everyone has to invest in.

[Plantagenet]

We've already got inflation.

Gas costs about a buck more now then it did a year ago. Food also costs more. In fact, just about everything costs more.

The only people who whine about not having inflation are people who are so rich they don't notice all the inflation.

[dolanbaker]

$this->bbcode_second_pass_quote('PrestonSturges', 'W')ithout any inflation, you fall into a "liquidity trap." Krugmann wrote an article years ago about Japan's Lost Decade. The government has no ability to stimulate the economy and cash is the ultimate investment. Capital no longer flows for investments, only games that destroy trillions of equity so a handful of people can skim commissions and fees. This shrinkage due to equity destruction only makes the remaining cash more valuable. Without inflation, growth can drop to zero unless there is a game changing technology that everyone has to invest in.

[rangerone314]

Not much is wrong with SMALL inflation as long as wages keep up, which is not guaranteed.

Hopefully someone in power comes up with the thought that a steady-state economy might be a good thing to plan for.

[Ferretlover]

As long as it does not affect me, mine or our lifestyles, nothing is wrong with it!

[Pops]

Negative interest is where we're at now. 10 yr treasuries at <2% and inflation at maybe 2-3% if you include energy and food, less in reality for the accumulation class but close anyway.

But even excluding inflation, effective rates are already going negative:
$this->bbcode_second_pass_quote('', 'B')ank of New York Mellon Corp. on Thursday took the extraordinary step of telling large clients it will charge them to hold cash.

[PrestonSturges]

Bank fees for large accounts shows that banks are so chock full of cash they are choking on it. Nobody wants to borrow that cash, even at near zero interest and the banks would make no money lending it either. Cash is king as an investment. Only a few hyperwealthy individuals has any and them that do has quite a bit of it. When you own the world, your first priority is not to go build a factory or even hire more fry cooks.

[Kez]

The problem with consistent inflation over several decades is that the people who save, and stay out of debt, get screwed. My wages never keep up with inflation, and I keep looking for safe investments, but I often think it would just be better to just spend more now and save less, because I don't see deflation any time soon. If deflation arrives, then the savers like myself are sitting pretty.

I am convinced that the only thing keeping the US from seeing too much inflation is because of the massive trade deficit. We print more money, but half a trillion of it is exported to other countries each year.

[PrestonSturges]

The US should not tax savings AND promise a rate of return 2 points above prime.

[PrestonSturges]

The US should not tax savings AND promise a rate of return 2 points above prime.

[smiley]

$this->bbcode_second_pass_quote('pops', 'I') had not really considered 'negative interest' as some kind of lever to be pulled or inflation to be a good thing.

[Pops]

$this->bbcode_second_pass_quote('smiley', ' ')Because this tool usually ends up being used for transferring money, from those who cannot defend themselves, to those who dont deserve it.

[Cog]

If you had bought gold for the last 10 years you would have beat inflation by a considerable amount.

[smiley]

$this->bbcode_second_pass_quote('', 'T')he whole point of having a low but positive inflation target is to encourage investment instead of burying cash in the back yard or buying gold and sticking it in a safety deposit box.

[prajeshbhat]

$this->bbcode_second_pass_quote('Pops', 'N')o doubt stuffing cash in your mattress will result in losing value to inflation. The whole point of having a low but positive inflation target is to encourage investment instead of burying cash in the back yard or buying gold and sticking it in a safety deposit box.

[evilgenius]

$this->bbcode_second_pass_quote('Sys1', 'W')e have passed peak oil, so we will statistically be poorer and poorer.
If it's inflation, it means we'll still have a job, but it won't pay as much as before. And will pay less and less.
If it's deflation, it means some people will be incredibly rich while most of citizens will be jobless.

Inflation is communism, deflation is capitalism.

[prajeshbhat]

$this->bbcode_second_pass_quote('evilgenius', 'C')an you see that for the Fed to fight yesterday's war, over inflation, every time that they go to bat risks a bubble? Some people think it's some kind of conspiracy. I don't. Sure, it's possible that when Alan Greenspan tried to talk down inflation, saying that he was most afraid of wages going up (thus keeping wages down and feeding the bubble), he was appealing to the interests of a vast right wing conspiracy. Personally, I chalk it up to the limits of the human mind.