Inflation

Discussion in 'Economy' started by vmfedor, Aug 7, 2012.

  1. vmfedor
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    vmfedor Rookie

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    To counter the dangerous inflation that our dollar is experiencing, couldn't the federal government start accepting silver as a method of tax payment and mint silver coins for a few years instead of $20.00, $50.00 and $100.00 bills?

    Pardon me because I know nothing about economics... this is just something that I was wondering about. :)
     
  2. uscitizen
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    uscitizen Senior Member

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    Proper inflation saves gas.
     
  3. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    That would interfere with their Money Printing Scam they have going.
     
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  4. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    can you say what makes you think there is dangerous inflation??????????
     
  5. vmfedor
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    vmfedor Rookie

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    The fact that any money that was invested in the year 2002 by now has now lost more than 1/5 of its value. The investment would have needed an interest rate of 5% just to maintain its value against inflation.
     
  6. expat_panama
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    expat_panama Silver Member

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    Let's sort this out.
    That's hard to believe, but the key question here is whether you want to know more or not.
    We are not having a general dangerous inflation. Sure, we hear that nonsense a lot, but that's because bad news sells whether it's true or not. Inflation's measured by price changes, not talk.
    HIstorcal price records show that inflation was at its worse during times with silver or gold money than since federal reserve notes came into use, but metal vendors won't tell you that.
     
  7. expat_panama
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    expat_panama Silver Member

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    For one thing, money is not an investment. It's a medium of exchange, a unit of account, but it's not an investment. The other thing is math, that 20% in ten years is less than 2% per year (1.02^10=1.22).

    [​IMG]
     
  8. pinqy
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    pinqy Gold Member

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    5% interest for 10 years, compounded annually gives a total increase of X*1.05^10 = x*1.629....62.9% increase. To get a 20% increase the APR would be 1.8%

    Overall, Since January 2002, average prices have increased around 30%...that's less than 2%/year. Hyperinflation is usually considered about 50%/MONTH.

    Inflation is NOT a current problem...if anything it's too low, as evidenced by the lack of COLA increases in 2009 and 2010 because of low or negative inflation.
     
  9. expat_panama
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    expat_panama Silver Member

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    He said he knew nothing about economics, but maybe he forgot to mention knowing nothing about math.
     
  10. pinqy
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    pinqy Gold Member

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    To be fair, his math error wasn't unusual. I had to double check to make sure I was doing the math right.

    I'm still trying to figure out a formula for the intial monthly payment of powerball. I know that the current jackpot is 212 million and that the annuity payments are increased every year by 4% but I can't figure out a simpler formula than 212,000,000 = X(1.04^0+1.04^1+1.04^2+...+1.04^29). there has to be an easier way than manually adding the sum, I just can't remember it.

    ETA: ok figured it out...the 1st year's payout is $212,000,000/((1-1.04^30)/(1-1.04)) = $3,779,981.02
    and the payout in year 30 would be $11,788,443.28
     
    Last edited: Aug 8, 2012

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