when inflation comes blame big government

[the1]

There's something about compounding interest that gives me a boner. Had you invested a $1 during that 200 years that inflation destroyed that dollar you'd have 115,126 dollars. Or, better yet, invest $1 per year at that rate and you have a whopping 1,918,748 dollars. Damn, that's a lot of dollars. Please don't make me adjust that for inflation because you'll kill my boner.

Moral of the story. Just save dollars and don't worry too much about inflation. How does that saying go? A dollar saved is a dollar....earned. Who said that again? Oh yeah, the guy whos mug shot sits on $100's.

Quote from Timmy.Geithner:

It's the nature of currencies. The problem is, the average person can't grasp the idea of exponential growth.

Let's say you start with a brand new currency. Assume the average annual inflation rate to be 6%. After 12 years the currency will have lost half its value. After 40 years it will lose 90% of its value. And after 100 years it will have lost 99.71% of its value.

So, if the average income was $400 in 1900, and assuming the average inflation rate was 6% over the last 100 years, the average income should be $258,000 in 2011.

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THE MATH:

If something, in this case a currency, is growing at r% rate per period. That means after one period it will go from 1 to 1 + r%.

1 + r% = 1 + r/100 = 1 + 0.0r = 1.0r

After 2 periods it will go from (1 + r%) to (1 + r%) + r% + (r% of r%).

(1 + r%) + r% + (r% of r%) = 1.0r + 0.0r + (0.0r x 0.0r) = (1.0r)^2

Thus after n periods it will have grown from 1 to (1.0r)^n

In order to find what fraction of the initial value the current currency holds, we divide the initial value by the current value:

1/(1.0r)^n

In order to find out what fraction of the initial value it has lost, you simply subtract the above from 1, thus you have:

1 - (1/(1.0r)^n))

Example:

1 - (1/(1.06)^200))

If you plug the above into google search or your calculator, you will see that after 200 years, the currency will have lost 99.999% of its value


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"On a long enough timeline, the survival rate for everyone drops to zero."
Fight Club

 

[antitrust]

Quote from Timmy.Geithner:

All in all, government is the problem.

I'm so upset to see that most Americans are so fucking blind that they are the ones who are asking the government for more intervention. This is so fucking sad, America is in a rapid decline to third world status, and all Americans are begging for, is more rules and regulations. Government intervention is what's killing this country.

Whatever! It's not like I can fix it! I guess the good thing is, we're all going to suffer together.

the fed is is not part of the government. It was intentionality created to isolate itself from government politicing

 

[peilthetraveler]

in 1626 we bought manhattan island off the indians for about $24 worth of trinkets. They say if you invested that money at 8%, it would still be enough to buy manhattan island today.