Dumb money should go to Zero - ie: inflation is necessary.

[blazespinnaker]

(I realize a lot of iTulipers are going to take offense to this. But the reason I post this here and not elsewhere is because I think the iTulip crowd is one of the smartest around, if a bit misguided)

Basically - inflation means that dumb money should go to zero.

Simply sitting on a pile of gold coins does nothing for the economy and the world.

Structurally, we need inflation to force people with money to invest. Buy businesses, create businesses, invest in businesses.

There must be something that erodes the savings of people who are not TAKING RISKS.

Because it is risk taking which naturally moves the world forward. It's taking chances, making mistakes, trying new things.

People who consume too much are bad for the world, but so are people who SAVE too much.

What we really want are people who INVEST.

Inflation forces people to invest.

[goadam1]

Re: Dumb money should go to Zero - ie: inflation is necessary.

So I should buy a stock that is too expensive compared to growth or a house that exceeds growth in wages or lease a car I don't need or buy bonds that return less than inflation or buy equipment for my company I don't need and I should assume that my future income will be as constant as my present income. Bull.

[skidder]

Re: Dumb money should go to Zero - ie: inflation is necessary.

I'm investing in gold mines, does that count? Other than, you know, for stupidity?

[narcissus]

Re: Dumb money should go to Zero - ie: inflation is necessary.

(I realize a lot of iTulipers are going to take offense to this. But the reason I post this here and not elsewhere is because I think the iTulip crowd is one of the smartest around, if a bit misguided)

Basically - inflation means that dumb money should go to zero.

Simply sitting on a pile of gold coins does nothing for the economy and the world.

Structurally, we need inflation to force people with money to invest. Buy businesses, create businesses, invest in businesses.

There must be something that erodes the savings of people who are not TAKING RISKS.

Because it is risk taking which naturally moves the world forward. It's taking chances, making mistakes, trying new things.

People who consume too much are bad for the world, but so are people who SAVE too much.

What we really want are people who INVEST.

Inflation forces people to invest.

Thats what many people thouht they were doing instead they were just fueling ponzi schemes. Cash is king for the moment.

[c1ue]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Uh, blaze, what about all the widows, orphans, and other parts of society that aren't spending all their time reading iTulip?

While pragmatically Outback Oracle's views are never going to hold up to the incoming devaluation storm (note: devaluation not exactly the same as inflation!), on the other hand I do believe that it should not be necessary that anyone with more than 2 nickels to rub together must be out there competing with EJ and his venture capitalist brethren to make sure their investments yield well.

Nor that 'money managers' be institutionalized as such an investment climate would dictate.

No disrespect intended for any demographic types mentioned above.

[D-Mack]

Re: Dumb money should go to Zero - ie: inflation is necessary.

It also gives power to those who issue or get the currency first.

The gov. can spend it without loosing much purchasing power.

[blazespinnaker]

Re: Dumb money should go to Zero - ie: inflation is necessary.

I'm investing in gold mines, does that count? Other than, you know, for stupidity?

Well, if you're investing based on the notion that the world is going to adopt a currency which would set inflation to 0 as it is no longer fiat, then I think it's not a sound investment.

Money is just money and really quite meaningless.

The real thing to own is value. Something that makes the world a better place and everyone wants it. And something that can't be easily copied.

Warren Buffet understands this quite well. This is why he dumped his gold / currency hedges and just bought global businesses instead.

[blazespinnaker]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Uh, blaze, what about all the widows, orphans, and other parts of society that aren't spending all their time reading iTulip?

While pragmatically Outback Oracle's views are never going to hold up to the incoming devaluation storm (note: devaluation not exactly the same as inflation!), on the other hand I do believe that it should not be necessary that anyone with more than 2 nickels to rub together must be out there competing with EJ and his venture capitalist brethren to make sure their investments yield well.

Nor that 'money managers' be institutionalized as such an investment climate would dictate.

No disrespect intended for any demographic types mentioned above.

Well, Schiller has a response to that. Money managers need to be paid by the hour rather than as a % of their portfolio.

I think if they were paid by the hour, then you'd go hire them like a doctor or dentist. Certainly Orphans and Widows could do that.

[Nervous Drake]

Re: Dumb money should go to Zero - ie: inflation is necessary.

.

[jtabeb]

Re: Dumb money should go to Zero - ie: inflation is necessary.

(I realize a lot of iTulipers are going to take offense to this. But the reason I post this here and not elsewhere is because I think the iTulip crowd is one of the smartest around, if a bit misguided)

Basically - inflation means that dumb money should go to zero.

Simply sitting on a pile of gold coins does nothing for the economy and the world.

Structurally, we need inflation to force people with money to invest. Buy businesses, create businesses, invest in businesses.

There must be something that erodes the savings of people who are not TAKING RISKS.

Because it is risk taking which naturally moves the world forward. It's taking chances, making mistakes, trying new things.

People who consume too much are bad for the world, but so are people who SAVE too much.

What we really want are people who INVEST.

Inflation forces people to invest.

Yes let's use theft by inflation to force people to "invest" with all those trusty players on wall street.

Oh, wait a minute, we tried that already, and everyone that wasn't a crooked wall street CEO got ass-raped.

Yes, excellent idea, let's try it again and see if will work this time.

Your Avatar is quite well chosen, btw.

[The Outback Oracle]

Re: Dumb money should go to Zero - ie: inflation is necessary.

(I realize a lot of iTulipers are going to take offense to this. But the reason I post this here and not elsewhere is because I think the iTulip crowd is one of the smartest around, if a bit misguided)

Basically - inflation means that dumb money should go to zero.

Simply sitting on a pile of gold coins does nothing for the economy and the world.

Structurally, we need inflation to force people with money to invest. Buy businesses, create businesses, invest in businesses.

There must be something that erodes the savings of people who are not TAKING RISKS.

Because it is risk taking which naturally moves the world forward. It's taking chances, making mistakes, trying new things.

People who consume too much are bad for the world, but so are people who SAVE too much.

What we really want are people who INVEST.

Inflation forces people to invest.

Inflation does NOT lead to the USE of moeny. It leads to the MISUSE of money. Resources are used under inflation...they are misallocated! Scarce resources are used up on things that bring good to noone but a very few. Geez can't you see anything from the last 40 years? You've had continuous inflation for all that time...and what has it brought? A total f..kup is what!

[oddlots]

Re: Dumb money should go to Zero - ie: inflation is necessary.

There must be something that erodes the savings of people who are not TAKING RISKS.

Because it is risk taking which naturally moves the world forward. It's taking chances, making mistakes, trying new things.

People who consume too much are bad for the world, but so are people who SAVE too much.

What we really want are people who INVEST.

Inflation forces people to invest.

Errrr... Save too much? How about save at all? The savings rate has been reduced to zero. 70 % of US GDP is consumption based. We've been hoodwinked by debt peddler's into thinking that consumption can be investment (home renos anyone?) That's the missing term in your argument: consumption.

When I happened to turn on CNBC over the last 4 or 5 years and the question of the "resilient (US - read western) consumer" came up I always had the sordid fealing I was watching a bunch of guys betting on when the local drunk would fall off the barstool. People like this have literally de-meaned the term "investment" for me.

No one here is anti-investment. We are anti consumption masquerading as investment. And since the western world's economies have become so consumption dependant, so undermined by the dis-savings fuelled by asset price bubbles and the mirage of purported profit and investment that the FIRE economy represented (which has just evaporated), the only thing to do is take your marbles and go home until sanity re-emerges. That way there might be someone - apart from bankers and savvy financiers - who might have anything to invest when the real investments bob back to surface after being swamped and drowned by the pseudo investments that have been kited for the last, what, 20 years.

[blazespinnaker]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Yes let's use theft by inflation to force people to "invest" with all those trusty players on wall street.

Oh, wait a minute, we tried that already, and everyone that wasn't a crooked wall street CEO got ass-raped.

Yes, excellent idea, let's try it again and see if will work this time.

Your Avatar is quite well chosen, btw.

No one said to force you to invest in the stock market.

You could, for example, buy a car wash down the street. Or start up a bio tech company. Or do a private investment in a closely held highly automated manufacturing company.

Warren Buffet, for example, prefers to buy whole companies rather than small parts of them via the stock market. For obviously good reasons.

Cash is not king. Gold is not king. VALUE is king.

Own value.

Don't own a dead metal or some kind of fiat moon money.

[*T*]

Re: Dumb money should go to Zero - ie: inflation is necessary.

No one said to force you to invest in the stock market.

You could, for example, buy a car wash down the street. Or start up a bio tech company. Or do a private investment in a closely held highly automated manufacturing company.

Warren Buffet, for example, prefers to buy whole companies rather than small parts of them via the stock market. For obviously good reasons.

Cash is not king. Gold is not king. VALUE is king.

Own value.

Don't own a dead metal or some kind of fiat moon money.

I don't see value anywhere yet. And recklessness is not the same as a balanced approach to risk taking.

[c1ue]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Well, Schiller has a response to that. Money managers need to be paid by the hour rather than as a % of their portfolio.

I think if they were paid by the hour, then you'd go hire them like a doctor or dentist. Certainly Orphans and Widows could do that.

Blaze,

The money managers started that way.

But over time, the better ones (by various measures, mostly their own short term ones) demanded more and more.

Eventually you get what we have now: 2 and 20.

Unless the government mandates pay rates for money managers, this is always going to happen. And if the government does, then the money managers will likely go somewhere else where they can make more money.

It is very Schiller-like (Boston Brahmin leftie) to believe government can provide a solution via wage controls.

My point again is that there is no reason why everyone should be forced to play the money management game.