Quote:
Originally Posted by MoreToppsPlease
This is misinformation, and is quite ignorant. It can only be said to make people think the card market is expanding when in fact it’s contracting.
The $100 card you bought last November and sold for $106 two weeks ago netted you a loss.
Edit: if buying in volume it’s affecting you now each and every month. It also erodes market cap to a substantial extent.
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Quote:
Originally Posted by NatsSBR
It's unhelpful to analyze the implications of inflation on real ROI for a given transaction without considering alternatives. Let's assume a 6.0% flat inflation rate for ease of calculation. If I hadn't bought the $100 card that's worth $106 today, and instead I just saved the cash, my cash would still be subject to inflation that reduces its real value in December 2020 terms to about $94.34. That means that if I bought a card for $100 net in December 2020 and sold it for $106 net ($100 in December 2020), I am still up by almost $6 in real terms as compared to holding cash. Inflation's effect on my real purchasing power in your example is trivial.
We have seen pretty much constant inflation in America since a brief, very mild deflationary period at the height of the Great Recession. The inflation we're feeling right now is worse than normal but will most likely subside as the Fed tightens monetary policy, people burn through their pandemic cash hoards, and supply chain restrictions ease. How long this will take is hard to say. In any case, owning tangible property is generally better than holding cash during an inflationary period, so the real question you want to be asking is whether cards are the best real asset to hold.
If you want to analyze the impact of inflation, don't do it in a vacuum.
Signed,
Your neighborhood friendly econonerd
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Bingo. MoreToppsPlease is the ignorant one for thinking the entire world plays according to inflation rules. You know what didn't increase by 6% since November? My salary. How many of us received a 6% raise or higher in the past year? I'm guessing not many. So setting cards aside, most of us are theoretically worse off than we were a year ago. "Theoretically" only because we had options, like buying cards or stocks to preserve what money we did have. Which brings back my original point that inflation is a moot point altogether. I didn't lose money if I sold a $100 card for $106. I preserved money that I otherwise would have lost since my job did not offer me a raise this year and I didn't want to just leave my savings in a bank account.
For arguments sake, if inflation is up 6%, and the card market is up 6%, and the average wage increase in America was 4%, cards still win. I'm not saying these are real numbers but it's a decent estimate considering the average wage is projected to increase by 4% next year. I do not know the 2021 stats but I'm guessing it was far less than 4% since we were in Covid recovery. Many people took pay cuts during Covid which only made it worse. The smart people were into tangibles this year.