Re:Ask HN: How to prosper under negative interest rates?
by qeternity on Tuesday March 31, 2020 @06:30PM
(#22743439)
I think you’re missing the meat of the argument: relatively speaking these things get cheaper over time. Bread has never been cheaper for most people. The average person can buy 2000 kcal for a few percent of their daily wages. However, in absolute terms, a few bucks today is many multiples of what it would have cost a century ago. The difference is that the increase in wages outpaced the increase in the cost of bread. And that is precisely what drives inflation. And that’s why talking in inflation adjusted terms (“real” terms) is so important. So even though bread costs 10x more than it did a century ago because people are earning 20x more so it’s actually cheaper. Compute works the same. Technological progress makes things cheaper in real terms and this is how quality of life improves.
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