2 thoughts on “Inflation is still a major problem”

  1. Posted 15/07/2013 at 15:57 | Permalink

    I reckon the pound has lost 98 per cent of its purchasing power in my lifetime (I was born in 1940). One of the serious effects is the overstatement of ‘real’ profits in company financial statements using money as the unit of account. For example, for a fixed asset lasting 15 years (not untypical), using straight-line depreciation, if inflation averages 4 per cent a year, money depreciation in accounts understates the ‘real’ depreciation by about one third. If one believes that an important duty of the monetary authorities is to maintain the purchasing power of money, our post-war experience might lead us to question whether governments are really suited for this task. Vince Cable is reported today as saying how important trust is in business, but who trusts the government over money?

  2. Posted 09/02/2014 at 07:54 | Permalink

    However we live in unusual times and the effects of central bank polices and financial repression. – Kris Krohn

Comments are closed.