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Questions tagged [inflation]

For questions that relate to inflation, which is the general increase in the prices of goods and services over a period of time.

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Why is inflation preferable to tariffs? [on hold]

I have read that devaluing currency (increasing inflation) makes the industry more competitive and the reasoning is that it makes the country's exports less expensive abroad and thus more desirable. ...
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2answers
75 views

What is the most accurate way to calculate the difference in value of one dollar between two target years?

This question concerns only USD, and doesn't need to be more granular than a year-level. I am trying to create a model that takes various features into account in explaining why a particular service ...
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1answer
58 views

Example TIPS and how inflation rate affects its principal

Taken from here. Say the Treasury issues an inflation-protected security with a $1,000 face value and a 3 percent coupon. In the first year, the investor receives $30 in two semiannual payments. ...
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4answers
128 views

Easy way to measure how inflation affects me

Is there a simple way to measure how inflation actually affects me? No complicated formulas, or building a basket of goods, give each product a weight in the basket, or spending large amounts of ...
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2answers
66 views

How can I calculate the present value of money from the past

I have to calculate a total sum of money which is composed of different values that have to be normalized to the present value of money: I have an array of values each value consisting on the amount ...
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1answer
1k views

Minimum Nest Egg in Today's Dollars? [closed]

As a follow-on to this question, if you wanted to have a $2.5 million nest egg in 20 years, what would the nest egg value have to be today (assuming no future contributions)? Assume: 20 years ...
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0answers
37 views

ADR value with US dollar inflation / recession

If one were to hold an ADR (American depositary receipt), and the currency of country of the underlying foreign security increases in value compared to the US dollar, or the US dollar drops in value (...
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1answer
380 views

Minimum Required Nest Egg Formula?

As a follow-up to this question, what is the minimum size of a nest egg to support 30 years of $5,583.33 monthly distributions? I want the $5,583.33 to increase with inflation each month. The ...
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1answer
61 views

Is The Federal Reserve's Balance Sheet Captured in any of the Money Supply Figures? [closed]

Is the $4T balance sheet captured in any of the money supply estimates or is it separate? Thank you in advance for your consideration and response.
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4answers
248 views

Can a rent increase with RPI value be enforced retroactively?

In October 2016 we have rented a lovely house through an agency and , while negotiating , the landlord proposed that after one year the rent should increase with the RPI value. We accepted but with a ...
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2answers
340 views

What causes S&P 500 to grow faster than inflation? [closed]

Facts Average annual rate of USA's inflation is ~2% for the past couple of years Average annual return of S&P 500 is 10% Why? Many people suggest to move your money of your bank, which is maybe ...
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3answers
358 views

Is it wise to buy a car in a high inflation rate?

A couple of my friends are planning on buying a car, and asked me to take part, so every one will own 1/3 of it. Here are some facts about me: The inflation rate in my country (Iran) is high. It's ...
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1answer
124 views

Why does adjusting for inflation work?

In my experience, different products change price at different rates. Even household staples such as bread or cleaning products don't change the same at the same time. So, when talking about the past ...
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1answer
102 views

UK bond yield below inflation rate means negative ROI likely if held until maturity?

Current UK bonds have nominal interest rates well below the current inflation rate, even the long-term ones. If we assume that, on average, the inflation rate remains the same or rises, and the bonds ...
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3answers
232 views

Hedging for inflation

I have liquidated my entire portfolio. I now have cash, earning low interest with tax. I want to build back my position, but am waiting for the right time in the market, likely higher interest rates. ...
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1answer
234 views

Whats the use of having a lot of gold, when no one buys it?

Whats the use of having a lot of gold, when no one buys it? Is it just to have a stable currency in the case when the value of money drops (inflation)?
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2answers
310 views

Calculating salary loss from inflation

When it comes to inflation, I simply know that it is an increase in prices that results in a fall of the currency's value. I'd like to apply this to wages in a workplace that has not provided a pay ...
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16answers
19k views

Why would I ever put my money into a savings account that returns less than the current inflation rate?

I like a safe investment as much as the next guy. But can anyone give me a good argument on why I should invest in a bond or a savings account that returns less than inflation? It seems to me that I ...
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2answers
138 views

How do traders in hyperinflation economies know how much to inflate their prices?

Reading some of the accounts of the last days of the Weimar Republic (as well as more recent articles about the declining Venezuelan economy), I was struck by the fact that traders and sellers seem to ...
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6answers
3k views

Should I max or min my affordability on a new home?

Situation: Around 1,000 month disposable between 2 of us. Current mortage outstanding balance is 95k on a 120k property, saving almost entirety of disposable income. Now the situation has arisen ...
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8answers
5k views

Why can more jobs mean more inflation and decreased stock prices? What are other links in the chain to watch out for? [closed]

Many news outlets, such as this one (there are many examples), are reporting that the current US stock sell-off is due to a stronger-than-expected jobs report in January and fears of inflation and ...
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2answers
98 views

I am trying to figure out what a weaker dollar in the future would mean for a foreign investor

If the USD becomes weaker compared to EUR in the future, would it be wise for a European investor to buy US stocks? I imagine the following scenario: I buy 100 Shares of a company at 1$ each. Let's ...
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1answer
225 views

Why is inflation incorrect [closed]

I track my expenditure accurately. Over the last 13 years, the rise in my cost of living has been zero. This is for true, like for like tracked expenditure. CPI has risen around 38% in that time. My ...
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2answers
170 views

How to calculate worth of money N year ago from given inflation value

I want to calculate worth of money N years ago. Based on this post, it can be calculated using CPI, but I want to use given inflation value N years ago. It better if I can get reference(s) of formula ...
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5answers
834 views

Is there any difference in paying upfront versus in monthly installments?

So let's assume I wanted to rent a house which has monthly rent e.g 300 euro every month starting at 1/1/2010. And let's assume I wanted to rent this house for 24 months. Only in terms of inflation ...
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1answer
58 views

How foreign cash is beneficial for a country? [closed]

Imagine for example people of country X working abroad ( in Europe as an example) and bring home every month 3000 euro which is equivalent to 9000000 of local currency for example. How does this cash ...
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2answers
280 views

Life Insurance payout vs. inflation costs

I'm currently thinking about purchasing 10 Pay whole-life insurance and I wanted to calculate how long it would take for the guaranteed cash value to break even with the out-of-pocket annual premium ...
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4answers
925 views

Is gold subject to inflation? [duplicate]

You know, we all have inflation. You can buy less on your USD, Euros and RUBs today than year before. I was advised to buy gold if I do not want my money be eaten by inflation. Gold is advised for ...
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2answers
339 views

Salaries updated for inflation

If annual salary increase percentages are less than inflation doesn't that mean that each year is financially tougher than the last?
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5answers
7k views

What does an x% inflation rate actually mean?

I've been reading some explanations of inflation and I think I generally understand what it is. What I don't understand however, and I believe this should be trivial, is what a (monthly) inflation of ...
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1answer
154 views

Why does the SNB consider the swiss franc overvalued? [closed]

The swiss franc became ~20% stronger in January 2015, when the swiss national bank removed the 1.20 cap. Ever since, the SNB has consistently been saying that the franc is overvalued, and has made ...
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2answers
326 views

Why doesn't Vanguard TIPS fund (VIPSX) match the CPI?

I was looking at the recent performance of the Vanguard Inflation-Protected Securities Fund (VIPSX). In the period from September 30, 2016 until June 30, 2017, VIPSX went from 13.79 to 13.07 - a drop ...
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3answers
223 views

Calculating worth of money at different times

I have seen some documentaries mentioning some amount of money in a particular year and then telling how much would it worth today. One such example is on the Wikipedia page of Pablo Escobar, which ...
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1answer
144 views

Discrepancy in table 2.1 Pg 49 in the book The Intelligent Investor by Benjamin Graham

Intelligent Investor Table 2-1 Pg 49 The above pic shows inflation at 5 years intervals. I am finding a bit hard to understand this table. For e.g. calculation of percentage rise in wholesale prices ...
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1answer
132 views

IT Jobs - Government vs Private Sector - Earnings in the Longrun [closed]

Looking for some career advice -- I’m basically torn between leaving my current state government job (a job I got right out of college) and going into the private sector / consulting. I’m located in ...
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1answer
109 views

How do I find the average annual inflation between two dates?

I'm trying to figure out the average inflation between 1926 and 2015 so I can subtract it from the cumulative annual growth rate of average annual bond return during that period (5.4% according to ...
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2answers
209 views

How can I figure out how much of a salary I need in the future, adjusting for inflation?

I looked at an inflation calculator to see what salary would be needed in 35 years to keep current "state of living." I put in 50,000 for today. http://www.halfhill.com/inflation_js.html (I have no ...
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1answer
379 views

How much value will money lose if left in a checking account?

My younger brother has been working for over 3 years now and he has very good financial discipline so he has been able to save more than 30k just from his paychecks (not including 401k which his ...
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1answer
176 views

Future value of a compound-interest savings account when contributions are inflation linked

I've got a savings objective to achieve in 6 years and I'm trying to work out the percentage of salary I need to put towards it to achieve it. I am trying to work out how to calculate the future ...
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1answer
158 views

Does taxation of Treasury Inflation Protected Securities (TIPS) undermine their function as protection against inflation?

From this document from Vanguard: TIPS are taxed in a slightly different manner than conventional Treasury bonds. The periodic inflation-based “gross-up” in the principal of TIPS is taxed at ...
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2answers
137 views

How do these inflation figures make sense?

In trying to find annual inflation for the UK, I came across this page: http://www.rateinflation.com/inflation-rate/uk-historical-inflation-rate I don't see how the annual inflation rate to the ...
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1answer
107 views

Computing initial required cash for retirement

I am trying to create a simple retirement calculator. My inputs are: annual income required during retirement (before inflation) inflation rate number of years of retirement yield on investment I ...
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1answer
198 views

Why is gold price falling in late 2016 given that it has historically rose when there are fears of inflation? [closed]

Since Trump got elected as president, gold price fall has accelerated. At the same time, fears of inflation heightened given expectation of Trump's fiscal stimulus. The dramatic fall in bond prices is ...
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1answer
471 views

How to calculate the monthly inflation rate from CPI?

I'm wondering how the monthly inflation rate is calculated from the consumer price index? Here you can find the monthly CPI data from 1913 - 2016: https://fred.stlouisfed.org/series/CPIAUCNS From ...
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0answers
45 views

How are international exhange rates set and how does inflation affect the exchange rates between two nations? [duplicate]

I have few questions quarreling in my mind : How are the Exchange rates set for all countries? Is there any governing body been responsible for these dynamic exchange rates? How come daily or few ...
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3answers
308 views

Does the rise in ACA premiums affect employer-provided health insurance premiums?

So I hear a lot about rising premiums and that the ACA is the leading cause. Recently I heard that the majority of people still get their health insurance through their employer. Is there merit that ...
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4answers
7k views

What Was “A Lot of Money” In 1971?

In 1971 before the United States left the gold standard, the median home price was approximately $24,000. Now, the median home price is approximately $180,000. For people who were alive then and ...
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1answer
213 views

What are my options other than stock piling money in a savings account?

As a college student, what are my options for investments to keep up with inflation? Savings accounts are worthless as I don't have enough capital to make any benefit. I am sitting at around $11,000 ...
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3answers
210 views

Why does the Fed use PCE over CPI? [closed]

The Fed has used PCE being at 1.6% as an excuse not to raise rates over the past few FOMC meetings even though (core) CPI is running at 2.3%. After (cursorily) reviewing the difference between the ...
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1answer
166 views

Determining amount of inflation between two dates

How do I determine the inflation rate between two dates? Can I use the difference in consumer price index between the dates rather than a series of inflation rates? Reason for the question: I am ...