Originally Posted By: tanstaafl.
Originally Posted By: peter
Notice that inflation does not "steal" any value from savings that are not money: property, for instance, or art.
Until the loss of purchasing power of the money (aka: inflation) is greater than the appreciation of real value of the property...

For lack of a better metric, I define real value as "How many hours of work did/does it take to obtain the property."

But the "real value", thus defined, isn't affected by the work:money ratio or the house:money ratio, as long as they change in sync. So your "until" isn't really the case. As long as "the appreciation of the real value of the property" isn't a negative number, inflation isn't "stealing" any of the property's value.

If what you're saying is that you have a mixed portfolio, with some of your savings in property and some in money, then yes of course, as in any portfolio, the losses on your poor long-term investment (money) can outweigh the gains on your good long-term investment (property). Like I said, the reason that (a small amount of) inflation acts to increase prosperity and productivity, is that it makes money look like a poor long-term investment.

Peter