Posted: 3/22/2012 3:42:49 PM
QUOTE Originally Posted by KOAJ:
money will go to something to hold its value/purchasing power, like commodities or the stock market to beat inflation
we're actually very lucky that we are in a depression or we would have rampant inflation
i did some double long like the DXO but i only held for a little while. very little positions right now. just focusing on building revenue streams and income instead of trying to beat inflation or save. figure paying down a 4% loan is better than saving at 0.5%
That 4% loan is pre-tax, with your bracket it would mean a real rate after benefit of taxes and interest of closer to 3%. In the short term that seems like the right choice, but longer term and especially if you feel as you did long ago that inflation is coming, you will want to milk that 3% as long as you can..build savings and when rates ever do go up you will make more saving/investing than the rate of interest on the property.
The truth is if I have a house full of USD and I dont use it, the money is not being circulated and the multiplier effect is gone. Given the soft loan market and the soft economy in general I really do not think your view of the results are accurate. Then when you compare to other currencies, the net effect is even lower.
Commodities are not running due to inflation or money supply, they are running due to speculation and anticipation. That is based on greed and perception..which if wrong we saw what happened in 2008.
I think you are drawing conclusions based on historical results, and that in this case is erroneous.