Popular Blogger Says Dave Ramsey Does Not Understand Inflation

Popular Blogger Says Dave Ramsey Does Not Understand Inflation
As I explored Dave Ramsey's website I found out that he doesn't seem to understand what inflation is:From Dave's Website: http://www.daveramsey.com/etc/askdave/index.cfm?event=dspAskDave&intContentItemId=10639

Explanation Of InflationJanine has a pretty basic question ... how does inflation work, and how can we stop it? QUESTION: Janine wants to know what causes inflation, and how can it be stopped. Dave tells her what goes into it.ANSWER: Inflation is the increase of the cost of something. If the inflation rate of gasoline is 10%, that means the cost of gasoline went up 10%. What causes things to go up in price are a lot of variables. One thing that can make it happen is supply and demand. If there are 100 people wanting 10 things, there will be a bidding war that will drive the price up. Conversely, if there are 10 people wanting 100 things, the demand is not as great and the price goes down.Some other items in our economy have more complicated things to do with it. For example, if you buy food from outside the country, that country's economy affects average inflation in this economy. If you're buying a house and the shingles on the roof are more expensive because of oil in the shingles, then oil caused housing prices to go up. It gets very complicated and interconnected at that point. Basically, inflation is just the increase of prices.

Dave Ramsey is wrong - what he is describing is not the inflation that the caller was calling about. What Dave Ramsey is describing is price fluctuations due to supply and demand - not inflation caused by the devaluing of a currencies worth because of the amount of money in circulation. What is happening in Zimbabwe is not simply "just the increase of prices".My conclusion here is that Dave Ramsey is brilliant at helping people get out of debt - he's designed a program that seems to have amazing results. And if you need to get out of debt you might want to consider his advice. But for investments (he seems to prefer rental property and growth mutual funds) he doesn't seem to have an accurate understanding of the larger picture and you may want to see what he says and balance it with other peoples advice (or just trust your gut instinct and do what you think is right.) He also seems a bit too quick to discount people by calling them "nutburger's".I wish Dave the best of luck, but wish he was aware of what is happening in Zimbabwe and could understand Gold and Silver isn't just for investments. He is in a position to encourage people to prepare, but he seems to prefer to call people getting prepared "nutburger's" instead.
From:http://mountainsteps.blogspot.com/2009/03/dave-ramsey-thinks-buying-gold-is.html

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