We are familiar with Mark Twain’s book Adventures of Tom Sawyer, published in 1879. Tom stumbles upon a box of gold which the adults invest for him while giving him an allowance of one dollar a day. One dollar today buys 3.6% of what Tom’s dollar bought in 1876. The average inflation rate since that […]
First, a thank you to all who gifted a membership or a one-on-one zoom meeting to friends and relatives. We think that they make ideal gifts. Consider it. And now, our sincere gratitude to all members who took the time to respond to our Friday, July 15 survey about the impact of inflation in their […]
The media tell us that governments are doing everything possible to tame inflation. Really? Like all borrowers and bond issuers, governments are the biggest beneficiaries of inflation. They repay all debts with money of lesser value. In addition, as the price of goods and services goes up due to inflation, so does the goods and […]
Albert Einstein said that compound interest is the eighth wonder of the world. Some writers have stated that he discovered the rule of 72 and that he considered it more important than discovering E = mc2! That could be an exaggeration, nevertheless…. A brief review of the rule of 72: If we take the rate […]
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A sincere thank you to all of you who bought memberships in the Monday Morning program as gifts. If you have not done so, consider it. Yesterday’s Wall Street Journal had an article on the current inflation rate. At 6.7% for November, it is the highest in nearly 40 years for that month! Not guilty. The annual […]
The main reason for investing rather than simply saving is to keep up with or to outpace inflation. Among themselves, economists are welcome to discuss what type of inflation we have. Is it cost-push, demand-pull, or built-in? In what percentage is each present? Without an even elementary understanding of economics, John and Jane Doe see […]
If you look at the 1899 menu of Delmonico’s, the famous New York City restaurant, you will see that you could have had a first-rate dinner at that first-rate establishment for under five dollars! Today, a similar dinner at Delmonico’s would cost you about $130. An 1899 dollar is worth $27.00 today. Over that period, the […]
When she was assigned on Friday, June 16 she should have stayed entirely in cash. Over the long run, cash loses its purchasing power at the rate of inflation. However, it is the best place to be in a declining market. In a rising market, simply holding a security will produce better results than writing […]
Paul Krugman In a New York Times column last Tuesday, Nobel Prize-winning economist Paul Krugman predicted interest rates would return to virtually nothing once the inflation fight is over. Krugman predicted a return to near-zero interest for two reasons. First, long-term rates have a delayed effect and advanced economies central banks have raised rates this […]