Home Up Portfolio Investment Pyramid Daily Research Education Hall Press Video Literature Real Estate Subscribe
 

FAQ: Questions not asked about inflation

Posted November 3, 2008

Frequently not asked questions about inflation

 

  • Q. Assume the GNP grows by 0.4 % and the published inflation rate is 5 %. What is the real GNP?

  • A. Impossible to answer the question since we don't know the real inflation rate.

 

  • Q. Assume the GNP grows by 0,4 % and the real inflation rate is 15 %. What is the real GNP?

  • A. – 14,6 %

  • Q. Assume the real inflation rate is 15 %. How much interest does your investment has to yield to stay ahead?

  • A. At least 15 %

 

  • Q. Assuming a growth in total money supply (M3) of 20 %, how high is the real inflation rate?

  • A. 20 %

 

  •  Q. Assuming you buy a Treasury bill or Treasury bond yielding 5 % and the growth in money supply (M3) is 20 %, how much does your investment really yield per year?

  •  A. You loose 15 % per year.

 

  •  Q. What is the difference between taxation and inflation?

  •  A. Both actions are the same. Taxation is an official factor, however inflation has the same effect in an sneaky way.

 

Goldonomic, Florida, USA - +1 (772)-905-2491