Why is inflation bad?

[mister man]

i see,its even more mainstream than i initially thought.

i borrow the 10k, buy a car and then sell it cos its now due to inflation worth more even with the usual car depreciation than i bought it for.
the increase in the cars value more than offsets the increase costs ive got for all other items and services, food, utility bills , capital items i might need to purchase in inflationary times.

all i have to do now is wait for inflation to fall again, before i buy a car to replace the one ive just sold. if i really need a car i will have to buy it at the inflation figure % similar to the one i just sold the car at,meaning no nett gainunless i can just sell assets ive bought before inflationhit,or assets ive bought with borrowed money.
so inflation redistributes wealth if you dont need to replace anything you might have sold that you need, or buy any goods or services neccesary for survival..... have i finally got it now.

[mister man]

i see,its even more mainstream than i initially thought.

i borrow the 10k, buy a car and then sell it cos its now due to inflation worth more even with the usual car depreciation than i bought it for.
the increase in the cars value more than offsets the increase costs ive got for all other items and services, food, utility bills , capital items i might need to purchase in inflationary times.

all i have to do now is wait for inflation to fall again, before i buy a car to replace the one ive just sold. if i really need a car i will have to buy it at the inflation figure % similar to the one i just sold the car at,meaning no nett gain unless i can just sell assets ive bought before inflation hit,or assets ive bought with borrowed money.
so inflation redistributes wealth if you dont need to replace anything you might have sold that you need, or buy any goods or services neccesary for survival..... have i finally got it now.

[Iron]

Let's say a friend lends you £10K at zero interest, to be repaid fully in a year's time. And let's say that, in real terms, that £10K is worth only £9K in a year's time.

Had your friend not lent you that £10K, he would have used it to treat himself to a holiday. However, when you pay him back, he'll still use it to buy a holiday. But he'll have to make do with a slightly less posh hotel, as that £10K will only buy him 90% of what it would have bought him 12 months earlier. So in effect, the loan has cost him a grand.

BTW, do you agree that there are winners and losers when it comes to house price inflation?

Jeff

[mister man]

rite so the 1k my mates lost ive gained,which offsets the loss ive made on all goods and services going up,so im even,thanks mate, but hes 1k down and living in the same infaltionary times as me, so hes double down.
so the wealths been redistributed away from my mate and not back to me in total.

the car dealers not happy, cos hes sold a car and had to buy it back for more.
anyone without a loan is losing out, and anyone buying items that are not appreciating assets like food etc is losing out.

it sounds like wealth redistribution heaven ...

lets all move to inflation land
im sure ive missed something,somewhere, but then i usually do,maybe i should have bought 2 cars and less food,or taken out a bigger loan or something.
my mate shouldnt have lent me the money and the car dealer shouldnt have sold me the car...
ims truggling to find the redistributives postives here, but then i obviously still dont get it

[Iron]

This conversation reminds me of this clip:

http://www.youtube.com/watch?v=4mGXYVlLJQo

I think we'll need to agree to disagree on this one!

Jeff

[mister man]

ok karl we will agree to disagree