What is Your Position on Inflation?

If you read Monday’s post about the movie, In Time, you know that it is a futuristic thriller about time as the ultimate currency.  I won’t recap the post from two days ago, but instead want to highlight one of the scenes from the movie.  After Will and Sylvia had escaped the wealthy time zone and were running from place to place in the ghetto of Dayton, Will becomes discouraged.  They had been robbing banks and handing out the time (money) to the poor.  Will of course realizes that ultimately their efforts are futile.  He tells Sylvia that the rich would simply raise the prices of everything and the cost of living would increase.  I immediately thought to myself, “BINGO, dude!”  That is inflation!  Which brings me to today’s question and discussion–

What is Your Position on Inflation?

Now I am not talking about a political or philosophical stance on inflation.  I am talking about how you will be able to respond to an increase in the cost of living.  Are you in a hopeless position like the residents of the ghetto?  Or are you in a position to raise the cost of living of another person and profit from inflation?  Or are you somewhere in between?  And perhaps most importantly, which direction are you going?

Darwinian Capitalism

It doesn’t matter what social or economic model you most favor.  The reality is that there have been and will always be different social and class structures regardless.  Look at Libya, the former Soviet Union, the Roman Empire, Japan, the United States.  It doesn’t matter.  There will always be owners and renters, borrowers and lenders.

Even if you took all of the world’s wealth and split it up precisely evenly among all the world’s 7 billion inhabitants, by the next morning, there would be differences again.  Some might want to spend some of their money to get a particular food that they like.  Others might want to move closer to the mountains or the beach and be willing to pay extra to live there.  Others might be a buyer or seller of the second oldest profession and so services would have been exchanged for money.  The bottom line is that human nature will always be about fulfilling desires and trading money or time or possessions to get that done.

Back to the Question at Hand

When the price of gasoline increases from $3.05 to $3.35 in an afternoon, do you cringe?  Or do you own Exxon Mobil stock so as an owner you know that you benefit from higher prices?  When I first saw that yesterday, my initial gut reaction was to cringe since I was so hoping that I would see gas below $3 per gallon this winter.  But once I thought about it, I realized that this might in fact be neutralized by some of the investments in my retirement portfolio.

Do you own the shelter over your head?  Or are you worried that your rent will go up forcing you to move?  Do you own farmland or grow a garden?  Or do food prices dictate what you eat?  Can you change your own oil or fix your own sink?  Or do you have to wonder how it is that a plumber can charge so much?

So think about it!  What is your position on inflation?  Does the cost of living have you by the throat, or can you get the upper hand?  Are you stuck in Dayton or moving toward New Greenwich?  Feel free to share below.

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