Post
Topic
Board Economics
Re: Stephen Reed's Million Dollar Logistic Model
by
kutaka
on 12/08/2014, 13:54:04 UTC
I won't judge stupid behavior (here I am feeding the troll) but if products and services get cheaper and cheaper (price deflation)  only stupid people would risk buying 1 car today when they can buy 2 better cars for the same price next year.

Re read that Hayek book you were given at school.

This assumption is wrong.

1. You are never sure if will be able to buy two cars next year.
2. You might need the car for business, which will let you earn 3 times the value of car, so it is profitable.
3. You might just need the car of living - for example leaving on some remote land, where closest shop is 20km from you.

Just to make this theory even more wrong:

You can put your money in bank, getting (hopefully) more interest than inflation rate. Let's say you get 3%. So if you buy next year you can buy 1.03 cars.  Ergo, everyone who buys anything is stupid according to you.