Quote:
Originally Posted by freedogger
This hidden banker tax is manifested in many ways. One of the worst ways we pay the tax is in a regressive form of inflation. Governments like the hidden tax of inflation because it softens the discipline of having to balance the books. Central bankers like inflation too. It creates the appearance of a false prosperity and allows them to prop up the collateral supporting the private banking system. When Bernanke says he wants to target a 2% inflation rate he is truly saying he wants to confiscate nearly 25% of your cash every decade.
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If you had a fixed money supply, as technology/capital makes productivity go up, the nominal price of goods goes down, which means people are deterred from spending (since everything gets cheaper the longer you wait to buy it), and then the economy crashes.
Having the ability to print money and control interest rates to control inflation but setting a target rate of 0, you run the risk that you'll miss and go into deflation... and again, that's bad.
Small, controlled inflation is the way to go. You can beat inflation by investing.