Offer your thoughts or opinion on the input financial query or topic using your financial background.

Is inflation a good or bad thing? Why do governments want some inflation?
The classic definition of inflation is "too much money chasing too few goods."  Within a tight range, say 1-3%, inflation is somewhat benign.  There's a nice inflation widget at The Inflation Calculator which helps me see that an item costing $1000 in 1975 would now (2010) be about $4000, and $1000 from 1984 till now, just over $2000. I chose those two years to make a point. First, I am 48, I graduated college in 1984, so in my working life I've seen the value of the dollar drop by half. On the other hand it only took 9 years from 75-84 to see a similar amount of inflation occur.  I'd suggest that the 26 year period is far more acceptable than the 9. Savers should be aware of their real return vs what was a result of inflation. I'm not incensed either way but logically have to acknowledge the invisible tax of inflation. I get a (say) 6% return, pay 2% in tax, but I'm not ahead by 4%, 3% may be lost to inflation. On the flip side, my mortgage is 3.5%, after taxes that's 2.625%, but less than 0% after (long term) inflation. So as a debtor, I am benefiting by the effect of inflation on what I owe.  Interesting also to hear about deflation as we've grown used to it in the case of electronics but little else. Perhaps the iPad won't drop in price, but every year it will gain features and competitors will keep the tablet market moving. Yet people still buy these items.  Right now, there's not enough spending. I'd suggest that, good financial advice aside, people as a whole need to start spending to get the economy moving. The return of some inflation would be a barometer of that spending starting to occur.