[quote=jstoesz]That was exactly the article I was referring to. I saw it on the Gonzolo Lira blog
My point was that it is not so simple. Lifeisfunhuh, was making the point that A leads to B. Except, it is far from that simple. There are many times when inflation has crushed peoples buying power, and ability to borrow. They now have less to spend on housing and interest so that they can keep eating.
This is economics we are talking here. If you are predicting the future, you are either stupid, delusional, or a combination of the two.
As a parting contrarian statement…markets can stay irrational longer than you can stay solvent.[/quote]
I agree it’s not so simple. There are many unforeseen scenarios. I agree that inflation will crush people’s buying power and ability to borrow. However, if you already bought/already borrowed with a fixed rate, ability to borrow won’t affect you. However, the devaluation of your currency will affect positively. I assume that inflation won’t get to a point where no one can even buy food to eat without bringing a bag of cash to the market. However, glass half full would say hell with it, I’ll be hungry anyways, I can skip one meal and use my bag of cash that would buy me a loaf of bread and pay off my house. You get where I’m going with this?
I’m not predicting the future. I’m just stating what I understand about inflation or hyper inflation. Feel free to correct me if I make any mistake with my assumption. How does the statement “markets can stay irrational longer than you can stay solvent.” apply to inflation and devaluation of the currency debate?
