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Monday, 31 May 2010

Real Value Table

Where Julius Malema will take South Africa if no-one stops him: hyperinflation.

                     Real Value Table

Per cent of Today’s Real Value Destroyed
...........................................................Hyperinflation*
Annual Inflation                   2%          6%            10%             26%

Years                                  %             %              %                  %
    5                                     10            27              41                 78
  10                                     18            46              65                 95
  16                                     28            63              84                 99
  20                                     33            71              88
  30                                     45            84              96
  35                                     51            89              98
  44                                     59            93              99
  75                                     78            99
114                                     90
228                                     99

*Cumulative inflation over three years equals or is more than 100%: for example, inflation at 26% per annum for three years in a row.

The 2% column illustrates what HC accountants are unknowingly, unnecessarily and unintentionally doing in the low inflationary world to companies´ capital and profits with their very destructive stable measuring unit assumption; that is, with normal, generally accepted, traditional 700 year old Historical Cost Accounting in the USA, EU, etc.

The 6% column illustrates what they are doing in SA.
The 26% column illustrates what they are doing in Venezuela with the generous help of Hugo Chavez; Julius Malema´s model country: where he will take South Africa if no-one stops him.
Copyright © 2010 Nicolaas J Smith