Negative interest rates are only negative under the nominal Historical Cost Accounting paradigm.
The effect of negative interest rates is always positive under the Units of Constant Purchasing Power in terms of the Daily CPI paradigm during deflation.
Nicolaas Smith
Copyright (c) 2005-2016 Nicolaas J Smith. All rights reserved. No reproduction without permission.
Wednesday 31 August 2016
Sunday 31 July 2016
An inconvenient accounting truth
No balance sheet has ever balanced in real value under Historical Cost Accounting and no balance sheet ever will while money, subject to inflation and deflation, is used as the unstable unit of measure.
Under IFRS and US GAAP authorised Capital Maintenance in Units of Constant Purchasing Power in terms of the Daily CPI the constant purchasing power of capital is automatically maintained constant in real value in all entities at all levels of inflation, hyperinflation and deflation - ceteris paribus.
Nicolaas Smith Copyright (c) 2005-2016 Nicolaas J Smith. All rights reserved. No reproduction without permission.
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