Re:Ask HN: How to prosper under negative interest rates?
by chewz on Tuesday March 31, 2020 @04:43PM
(#22742330)
> get really really serious inflation of over 2%, 3%, maybe even more than 3%
Really serious inflation is when prices in supermarket change twice a day like in Brasil in the old times. It is Weimar style hyperinflation where everyone want to get rid of paper money right away.
Inflation of 2-3% is actually desirable - it is a sign of healthy, growing economy. Additionaly it is good for public finances as most expenditures is fixed and tax recipes are over the target. Yes it is a kind of tax on people but in healthy economy who cares?
Most central banks and banks in general (also insurers) dread deflation not small inflation.
Really serious inflation is when prices in supermarket change twice a day like in Brasil in the old times. It is Weimar style hyperinflation where everyone want to get rid of paper money right away.
Inflation of 2-3% is actually desirable - it is a sign of healthy, growing economy. Additionaly it is good for public finances as most expenditures is fixed and tax recipes are over the target. Yes it is a kind of tax on people but in healthy economy who cares?
Most central banks and banks in general (also insurers) dread deflation not small inflation.