Replies to post #103596 on Intel Corp (INTC)

[Elmer Phud]

you're aware that *some* inflation is a good thing, right?

It is for me. I benefit but not everybody does. Pity those on fixed incomes.

[Professor MD]

Elmer, you're aware that *some* inflation is a good thing, right?

Inflation reduces the gross debt of the USA. That is indeed a ”good thing” for the treasury but a “bad thing” those who invested in our Federal Bonds.

Lets estimate their loss during the last year due to one consequence of inflation, the decrease in the value of the dollar vs the Euro. Let us start with two sets of data:

1. As of August 3, 2011, the gross debt was $14.34 trillion dollars, of which $9.78 trillion was held by the public and $4.56 trillion was intragovernmental holdings.[4] The annual gross domestic product (GDP) to the end of June 2011 was $15.003 trillion (July 29, 2011 estimate),[5] with gross debt at a ratio of 96% of GDP, and debt held by the public at 65% of GDP.
(Quote from Wikipedia)

2. The value of the US Dollar vs.the Euro dropped by 24% during last year.
http://finance.yahoo.com/q/bc?s=USDEUR=X&t=1y&l=on&z=l&q=l&c=

$ 2.347 trillion out of the $9.78 held by our bondholders (mostly China and Arabs I hope) was lost in one year. That was definitely not a “good thing” for them.