Why do we need inflation?

Petey · #11 (**permalink**) 05-04-2008, 06:53 AM

Quote:

Originally Posted by mateocafe

As the wealthy are given massive tax breaks and allowed to shift their assets overseas....

um, where does that leave us? With a stimulus check? woo hoo

Now go spend that at the wal mart, whose products all come from overseas... um.

Screw that. Mine is going where it belongs. In the bank.

sachem · #12 (**permalink**) 05-04-2008, 06:55 AM

Quote:

Originally Posted by Petey

Screw that. Mine is going where it belongs. In the bank.

GWB won't be happy.

Petey · #13 (**permalink**) 05-04-2008, 07:05 AM

Quote:

Originally Posted by sachem

GWB won't be happy.

I'm sure he'll find another way to take it back eventually.

sachem · #14 (**permalink**) 05-04-2008, 07:07 AM

Quote:

Originally Posted by Petey

I'm sure he'll find another way to take it back eventually.

Right about that.

Petey · #15 (**permalink**) 05-04-2008, 07:45 AM

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basharp1 · #16 (**permalink**) 05-04-2008, 08:02 AM

Quote:

Originally Posted by Real0ne

Here is my math and no I dont piss around playing economics games with the math, I run right off the value of gold which is a direct indicator of inflation.

base 6 20

$1,000,000.00 $60,000.00 $12,000.00
$1,048,000.00 $62,880.00 $12,576.00
$1,098,304.00 $65,898.24 $13,179.65
$1,151,022.59 $69,061.36 $13,812.27
$1,206,271.68 $72,376.30 $14,475.26
$1,264,172.72 $75,850.36 $15,170.07
$1,324,853.01 $79,491.18 $15,898.24
$1,388,445.95 $83,306.76 $16,661.35
$1,455,091.36 $87,305.48 $17,461.10
$1,524,935.74 $91,496.14 $18,299.23
$1,598,132.66 $95,887.96 $19,177.59
$1,674,843.03 $100,490.58 $20,098.12
$1,755,235.49 $105,314.13 $21,062.83
$1,839,486.79 $110,369.21 $22,073.84
$1,927,782.16 $115,666.93 $23,133.39
$2,020,315.70 $121,218.94 $24,243.79
$2,117,290.86 $127,037.45 $25,407.49
$2,218,920.82 $133,135.25 $26,627.05
$2,325,429.02 $139,525.74 $27,905.15
$2,437,049.61 $146,222.98 $29,244.60
$2,554,027.99 $153,241.68 $30,648.34
$2,676,621.34 $160,597.28 $32,119.46
$2,805,099.16 $168,305.95 $33,661.19
$2,939,743.92 $176,384.64 $35,276.93
$3,080,851.63 $184,851.10 $36,970.22
$3,228,732.51 $193,723.95 $38,744.79
$3,383,711.67 $203,022.70 $40,604.54
$3,546,129.83 $212,767.79 $42,553.56
$3,716,344.06 $222,980.64 $44,596.13
$3,894,728.57 $233,683.71 $46,736.74
$4,081,675.55 $244,900.53 $48,980.11
$4,277,595.97 $256,655.76 $51,331.15
$4,482,920.58 $268,975.23 $53,795.05
$4,698,100.77 $281,886.05 $56,377.21
$4,923,609.60 $295,416.58 $59,083.32
$5,159,942.86 $309,596.57 $61,919.31
$5,407,620.12 $324,457.21 $64,891.44
$5,667,185.89 $340,031.15 $68,006.23
$5,939,210.81 $356,352.65 $71,270.53
$6,224,292.93 $373,457.58 $74,691.52
$6,523,058.99 $391,383.54 $78,276.71
$6,836,165.82 $410,169.95 $82,033.99
$7,164,301.78 $429,858.11 $85,971.62
$7,508,188.26 $450,491.30 $90,098.26
$7,868,581.30 $472,114.88 $94,422.98
$8,246,273.20 $494,776.39 $98,955.28
$8,642,094.32 $518,525.66 $103,705.13
$9,056,914.85 $543,414.89 $108,682.98
$9,491,646.76 $569,498.81 $113,899.76
$9,947,245.80 $596,834.75 $119,366.95
$10,424,713.60 $625,482.82 $125,096.56
$10,925,099.85 $655,505.99 $131,101.20
$11,449,504.65 $686,970.28 $137,394.06
$11,999,080.87 $719,944.85 $143,988.97
$12,575,036.75 $754,502.21 $150,900.44
$13,178,638.52 $790,718.31 $158,143.66
$13,811,213.16 $828,672.79 $165,734.56
$14,474,151.40 $868,449.08 $173,689.82
$15,168,910.66 $910,134.64 $182,026.93
$15,897,018.37 $953,821.10 $190,764.22
$16,660,075.26 $999,604.52 $199,920.90
$17,459,758.87 $1,047,585.53 $209,517.11
$18,297,827.29 $1,097,869.64 $219,573.93
$19,176,123.00 $1,150,567.38 $230,113.48
$20,096,576.91 $1,205,794.61 $241,158.92
$21,061,212.60 $1,263,672.76 $252,734.55
$22,072,150.81 $1,324,329.05 $264,865.81
$23,131,614.04 $1,387,896.84 $277,579.37
$24,241,931.52 $1,454,515.89 $290,903.18
$25,405,544.23 $1,524,332.65 $304,866.53
$26,625,010.35 $1,597,500.62 $319,500.12
$27,903,010.85 $1,674,180.65 $334,836.13

Total after taxes and inflation compunded annually = $656,541.43

1933 1oz $20.00/today $850.00 = $0.02

I thought it was the 72 rule?

.

The Rule of 72:
Question, How fast can I double my money?

Answer, If I'm earning net 12% (example) annually when will it double"

Rule of 72; 72/12=6 years, $10,000 will double if you continue to earn a net of 12% annually on your investment. The graph your using above, I believe is not representative of the "rule of 72" because its based on constant net return, I.E. 12% or what ever the rate of return is. Over an extended period you could establish a mean average and calulate it from there I suppose

Tileman · #17 (**permalink**) 05-04-2008, 08:30 AM

I am no economist but, like most, have an ample grasp of personal finances, budget, interest and both deflationary and inflationary markets.

It becomes much easier to understand how both inflation and deflation effect the market when yourself is at the very beginning of the cycle each and every time it switches. While people who file W-2's or work hourly with a guaranteed number of hours feel it's effects much later.

Inflation is a necessary component like it or not. However, that does not mean all inflation is good. In the utopia idea a steady 1% would be really nice but impossible. Deflation is also necessary to help correct a market that had previously over inflated.

Economists will argue forever micromanaging and depicting what is the healthy average, yadda yadda yadda so don't expect to every completely understand it.

Just take care of yourself and family as best you can and let the economists argue.

patriot2342001 · #18 (**permalink**) 05-04-2008, 08:39 AM

Quote:

Originally Posted by Bil_Stunbmun

Comrade Patriot, so good to see you. And I see that you are just as smart as ever.

You are so right, there never was any inflation when rulers of our glorious people's Democratic party had an Iron Fist holding our strings. Roosevelt had no inflation, Jimmy Carter only had 1% inflation. (or was it 100% inflation, I forget..)

These evil fascist neocon Republicans with their 4% inflation are ruining us all.

Like comrade Realone says, at 4% inflation prices double in 7 years. Realone is a mathematical genius. All those stupid evil neocon Republicans with their Net Present Value and Future Value calculus are just too dumb to understand the brilliance of the new Peoples Math!

Jimmy Carter? You mean the President that appointed Paul Volker to the Fed who raised interest rates to cut inflation? That Jimmy Carter? Reagan gained a lot from that.

MAcc2007 · #19 (**permalink**) 05-04-2008, 07:48 PM

Quote:

Originally Posted by patriot2342001

Jimmy Carter? You mean the President that appointed Paul Volker to the Fed who raised interest rates to cut inflation? That Jimmy Carter? Reagan gained a lot from that.

And Volker was wise for doing so, since it was only after he did so that stagflation came under control.

Real0ne · #20 (**permalink**) 05-05-2008, 06:31 PM

Quote:

Originally Posted by Tileman

Inflation is a necessary component like it or not.

In the utopia idea a steady 1% would be really nice but impossible.

Deflation is also necessary to help correct a market that had previously over inflated.

Ok I can understand small deviations like we had before the federal reserve corporation took over, but no one on nay board has been able to explain why we must have it and why we never deflated back so that our dollar is once again = to a dollar?

Why is it a one way street to 0 (zero)?
.