tag:blogger.com,1999:blog-7366878066073177705.post7872729576234052456..comments2024-02-09T18:16:45.614+00:00Comments on The Psy-Fi Blog: Money Illusiontimarrhttp://www.blogger.com/profile/06254802085744425067noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-7366878066073177705.post-67773973364403810452010-08-14T11:07:39.774+01:002010-08-14T11:07:39.774+01:00Very true about comparing asset class returns acro...Very true about comparing asset class returns across the decades while ignoring inflation.<br /><br />We really have to look at everything through the lens of real prices, although as you imply about half way down, one man's deflation is another man's cheap trainers that don't make up for the rising cost of health care.Monevatorhttp://monevator.comnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-194740261817437352010-08-11T12:41:05.672+01:002010-08-11T12:41:05.672+01:00As one with graduate degrees in both counseling an...As one with graduate degrees in both counseling and business (finance), I find your blog intriguiging. I especially liked the last line of this post relating price and value. Thanks for an interesting subject. Best regards, Barb FriedbergBarb Friedberghttps://www.blogger.com/profile/12044519456398288988noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-8389894481610431742010-08-09T13:43:59.275+01:002010-08-09T13:43:59.275+01:00Think about money illusion next time you are negot...Think about money illusion next time you are negotiating wages.<br /><br />The What is ... money illusion? article on eZonomics says experiments have shown that, in general, people think a cut of 2% to their wages is unfair.<br /><br />Perhaps the finding is not surprising. But the same research showed that people tend to see a 2% rise in nominal income as fair even when if inflation is running at 4%.<br /><br />See more at http://www.ing.com/ezonomics/showdoc.jsp?left=false&docid=427519eZonomicshttp://www.ezonomics.comnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-90431234152481300952010-08-05T07:42:28.667+01:002010-08-05T07:42:28.667+01:00Inflation isn't real wealth, but inflation cau...Inflation isn't real wealth, but inflation caused capital 'gains' are still taxable.<br /><br />Maybe this is one reason governments hate and fear deflation so much.<br /><br />Due to the 'money illusion', governments can tax inflation caused capital gains, and people don't realize that their tax rates are actually higher than they appear.Unknownhttps://www.blogger.com/profile/11394409575254934751noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-80543081789852203302010-08-05T02:22:34.305+01:002010-08-05T02:22:34.305+01:00Great post and great blog. Regarding stock prices:...Great post and great blog. Regarding stock prices: money illusion affects stock prices because investors use a higher nominal discount rate to value stocks, but fail to project cash flow growth at the correspondingly higher nominal growth rate.<br /><br />Here's a post I wrote on the topic a while back.<br />http://financeclippings.blogspot.com/2009/10/inflation-and-stock-prices.html<br /><br />I've added your blog to my blog roll on my blog http://financeclippings.blogspot.com. <br /><br />Keep up the good work!Richhttps://www.blogger.com/profile/16883355600904464858noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-68001954793671347192010-08-04T17:18:02.888+01:002010-08-04T17:18:02.888+01:00The biggest money illusion of them all is the idea...The biggest money illusion of them all is the idea that the nominal price of the market is its real value. In the past three decades we have seen stocks go from being valued at one-half of fair value to being valued at three times fair value. That means that those who owned $60,000 worth of stock in 2000 owned the equivalent of what those who owned $10,000 worth of stock in 1982 owned!<br /><br />RobRob Bennetthttp://arichlife.passionsaving.comnoreply@blogger.com