A negative interest rate is impossible under CMUCPP in terms of the Daily CPI.
Showing posts with label Nicolaas Smith on 2008/05/29 11:23:50 PM - Re: Logan. Show all posts
Showing posts with label Nicolaas Smith on 2008/05/29 11:23:50 PM - Re: Logan. Show all posts
Friday, 30 May 2008
Nicolaas Smith on 2008/05/29 11:23:50 PM - Re: Logan
Nicolaas Smith on 2008/05/29 11:23:50 PM - Re: Logan
Buy the ebook for $2.99 or £1.53 or €2.68
"Isn't the monthly inflation taken care of by the annual wage increase if based on annualised inflation rate?" Yes. That is one constant item. That is only salaries and wages. What about retained income, issued share capital, personal taxes, company taxes, VAT, trade debtors, trade creditors, profit and loss items, shareholders equity, etc? I always state: Historical Cost Accounting inflation destroys the real value of constant items never or not fully updated. Retained earnings, issued share capital of companies with no non-monetary items to revalue, etc, are never updated in non-hyperinflationary economies. Their values are destroyed and have always been destroyed at the full rate of inflation. The real values of salaries, wages, taxes, rents, etc are, only where they are not fully updated, destroyed at a lower rate than the full inflation rate.
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