Gary Brode of Deep Knowledge Investing and Robb Fahrion of Flying V Group discuss the 5 Things to Know in Investing This Week: The Economic Humor Issue -The 2% inflation target is random and unchanged. DKI Summary: Almost 40 years ago a New Zealand finance minister was questioned on television about his estimate for a sustainable and healthy rate of inflation. He had difficulty answering the question, but settled on 1%. That later got adjusted to 2%, and by the 1990s, began to be adopted by central banks. As of now, the 2% number remans unchanged despite some in the US government now calling for 3% - 4% inflation targets. DKI would like to remind you that the mandate of the Federal Reserve is “stable prices”. That means a 0% inflation rate. DKI Takeaway: I disagree with the often-repeated mantra that without inflation the economy would stall because no one would buy anything if they think the price will fall over time. I spoke with DKI intern, Andrew Brown. These items cover almost 100% of his spending; tuition, dorm/housing, food, car payment, auto insurance, computer for school. I’m confident that he wouldn’t delay any of that spending if he could get those items 5% cheaper next year. Stable prices encourage savings and investment which causes GDP growth. Inflation encourages immediate consumption. Inflation represents quiet slow theft of your savings by the government. Over a 40-year working career, a 2% inflation rate robs you of 55% of the value of your savings. Move the target to 4% and that theft becomes 79% of the value of your money. I know there are plenty of you who disagree and think we’ll have more economic growth (real not nominal) with higher inflation. Feel free to post your objection in the comments. Your links: This week's written version of the 5 Things with graphs: https://deepknowledgeinvesting.com/weekly-points-march-22nd-2024/ Deep Knowledge Investing Subscription Page: https://deepknowledgeinvesting.com/we... Flying V Group: https://www.flyingvgroup.com/ #deepknowledge #deepknowledgeinvesting #investingnews #garybrode #robbfahrion #flyingvgroup #dki #investmentresearch #investmentknowledge #investmentstrategy #investingstrategies #interestrates #inflation #federalreserve #inflation #inflationdata #inflationtarget