jackspirko on Nostr: Understanding Inflation - A Short Explanation You need to understand the rate of ...
Understanding Inflation - A Short Explanation
You need to understand the rate of inflation alone is not enough. That lower inflation rates doesn't equal prices going down at all, even a little bit.
Year one, inflation at 8%, a 1 dollar item is now 1.08
Year two, inflation at 12%, a one dollar item from year one, is now 1.21
Year three, inflation at 14%, a one dollar item from year one, is now 1.38
Year four, inflation goes "down" to only 3%, yay we win right?, A one dollar item from year one, is now 1.42.
Inflation is now "low" but the price is cumulative as is the true inflation. The true inflation rate here over 4 years is 42%.
The TV will say "inflation is going down", it isn't a lie, it also isn't the truth. Not to mention what happens if you get a "bad year" next, say just going back to 8% in the next year.
1.42 x 1.08 = 1.53
In year one 8% was 8 cents on the dollar, in year 5 it is 11 cents on the dollar of the previous year. And a total of 53% over 5 years.
Now do it on everything you buy and have to pay for, food, energy, housing, clothing.
Inflation is an at will unregulated tax on every thing you own, buy, sell, etc. It makes the income tax seem benevolent.
If you read this far you now understand the problem more than most so called "economic experts". Those who didn't read this far are likely wondering why things are so bad if the TV people say inflation is down.
You need to understand the rate of inflation alone is not enough. That lower inflation rates doesn't equal prices going down at all, even a little bit.
Year one, inflation at 8%, a 1 dollar item is now 1.08
Year two, inflation at 12%, a one dollar item from year one, is now 1.21
Year three, inflation at 14%, a one dollar item from year one, is now 1.38
Year four, inflation goes "down" to only 3%, yay we win right?, A one dollar item from year one, is now 1.42.
Inflation is now "low" but the price is cumulative as is the true inflation. The true inflation rate here over 4 years is 42%.
The TV will say "inflation is going down", it isn't a lie, it also isn't the truth. Not to mention what happens if you get a "bad year" next, say just going back to 8% in the next year.
1.42 x 1.08 = 1.53
In year one 8% was 8 cents on the dollar, in year 5 it is 11 cents on the dollar of the previous year. And a total of 53% over 5 years.
Now do it on everything you buy and have to pay for, food, energy, housing, clothing.
Inflation is an at will unregulated tax on every thing you own, buy, sell, etc. It makes the income tax seem benevolent.
If you read this far you now understand the problem more than most so called "economic experts". Those who didn't read this far are likely wondering why things are so bad if the TV people say inflation is down.