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Tuesday, 14 February 2012

Only a non-revisable Daily Consumer Price Index should be used with Capital Maintenance in Units of Constant Purchasing Power


Only a non-revisable Daily Consumer Price Index should be used with Capital Maintenance in Units of Constant Purchasing Power

Updated on 18 July 2013
The French National Statistics Institute makes corrections in the monthly published CPI during the next month. That is an unacceptable method under Capital Maintenance in Units of Constant Purchasing Power in terms of a Daily Consumer Price Index or daily rate.  
Revising previously published CPI data is not practical under Capital Maintenance in Units of Constant Purchasing Power since the monthly published CPI value is used for the calculation of the Daily CPI which is used on a daily basis to value government capital inflation-indexed bonds as well as to implement the Capital Maintenance in Units of Constant Purchasing Power model in terms of daily index. 
Legally binding transactions are concluded using the Daily CPI. It is not practical (legal?) to revise all daily legal contracts executed in terms of a Daily CPI that can be revised afterwards.  
Nicolaas Smith

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