Monday, August 3, 2009

Barron's on Inflation - Beware of Rotting Money


WHICH IS A BETTER STORE OF VALUE, BANANAS or corn? The answer is obvious to anyone who leaves a bunch of bananas lying around for a couple of weeks. Green bananas turn yellow, then black. They soften, then they rot. The fruit that was worth a couple of dollars two weeks earlier becomes worthless, at best. More likely, one must expend effort to clean up the mess: Rotten bananas have a negative value.