From Puru Saxena, who produces Money Matters, a monthly economic publication that highlights investment opportunities.

Some argue that inflation is a good thing, a necessity in the modern economy as it facilitates trade. Personally, I don't buy into this concept because throughout the 19th century, we witnessed mild deflation, yet our world made huge progress over that period.

The next time somebody says that inflation is OK, ask that person if they would like to own shares in [XYZ Company] if [XYZ Company] issued and gave away new shares every year? Would they be interested in owning stock in [XYZ] company if roughly 10% new shares were being added to its share capital every year?

The truth is that nobody in his right mind would invest in such a scam! Yet, people find it absolutely normal when the same thing happens to their money stock, otherwise known as savings!"

Puru uses a great analogy (diluting stock by continually issuing new shares) to explain the insanity of inflation (AKA diluting the money supply). If inflation is running at 5% (although certain statistics demonstrate that it's really around 7%), and you've got a savings account paying 4% APY (if you're lucky), you're not even breaking even.

In an inflationary environment, is it any wonder that people rush to own tangible assets such as businesses, real estate, gold, and commodities?