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Saturday, 19 April 2008

A 2% month on month rise in inflation will lead to hyperinflation in SA in 3 yrs time.

The expected month on month rise in CPIX in South Africa is 1.2% for March, 2008.

A 2% month on month rise in inflation will lead to hyperinflation in SA in 3 years time.

Hyperinflation is defined by the International Accounting Standards Board as: "the cumulative inflation rate over three years is approaching, or exceeds, 100%."

Continuous 2% month on month inflation equals 26% inflation after 1 year and 100% cumulative inflation over three years.

Scary isn´t it?

Get SA accountants to stop the stable measuring unit assumption and high or hyperinflation will never be able to destroy the SA economy.