Wednesday, 29 July 2009

A 1% drop in inflation

A 1% drop in inflation means that R19.5 billion will be maintained in the real value of the SA money supply (real value of the Rand) over the next year - if nothing else changes.

It also means that SA accountants will unknowingly destroy 1% or about R850 million less in the real value of the existing retained profits of JSE listed companies with their stable measuring unit assumption.

They will unknowingly only destroy about R84.15 billion in existing JSE retained profits over the next year - ceteris paribus.

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