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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3answers
287 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
136 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
336 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
536 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
1k views

Do high interest rates lead to higher bond yields or lower?

Interest rates & bond yields are positively correlated according to this: http://www.investopedia.com/ask/answers/04/031904.asp Thus High interest rates => High bond yields But at the same time, ...
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1answer
132 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
122 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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8answers
3k views

Is physical gold inflation-proof?

I always assumed that physical gold is inflation-proof, but my advisor at my bank claimed it is not — unfortunately without going into details. Now I wonder what he meant. My assumption was: If I buy ...
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1answer
249 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
926 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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2answers
155 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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2answers
116 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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16answers
21k 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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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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5answers
2k views

Relationship between silver and gold prices historically

Can anyone tell me, or point me to documentation that shows the historic relationship between gold and silver prices? Or, better yet, can anyone point me to a source that shows monthly or weekly gold ...
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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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1answer
266 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
1k views

Adjusting a value for inflation each month using rolling 12-monthly inflation figures

I have a figure that I want to adjust for inflation each month. I have monthly values for the UK Consumer Price Index but these are each for the change over the preceding 12 months. If my base value ...
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2answers
418 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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3answers
614 views

Too low interest rate in New Zealand

I came from a country with high interest rates where you can easily find an investment that pays more than inflation, but I moved to New Zealand and was surprised when I saw that the inflation rate is ...
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5answers
2k 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
69 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
352 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
1k 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
359 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
2k views

What is inflation?

What do people mean when they say a price is Inflation adjusted ? Like a car costing $100 in 1990 would cost $400 today adjusted to inflation? If I buy a car at $100 today and inflation is 0.5%. What ...
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5answers
10k 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
176 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
393 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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1answer
206 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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3answers
270 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
197 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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1answer
141 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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4answers
206 views

Inflation - Will prices of goods continue to monotonically increase in the long run? [closed]

The question primarily is based on the presumption that Governments would ideally want to maintain a small inflationary environment. In that case, are we really talking about a future where groceries ...
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3answers
245 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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2answers
227 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
321 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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2answers
157 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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5answers
6k views

Prices go up and salary doesn't: where goes delta?

I'm not sure that question is appropriate here, if it is not I will delete it. Question: I heard that in USA prices are rising, but salaries are not. This looks strange to me. It means that companies ...
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11answers
13k views

Is inflation a good or bad thing? Why do governments want some inflation?

Is inflation a good or bad thing? Why do governments want some inflation?
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1answer
203 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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3answers
11k views

What effect would currency devaluation have on my investments?

I am curious what effect currency devaluation has on the value of my various investments/assets. For instance, I have retirement savings in mutual funds, growth stocks, and bonds. First, let's ...
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1answer
744 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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3answers
659 views

What is the future of 401(k) in terms of stability and reliability?

Let me quote: 7) Your Retirement Plan is For S**t. I don’t care how much you set aside for your 401k. It’s over. The whole myth of savings is gone. Inflation will carve out the bulk of your ...
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3answers
328 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
8k 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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5answers
1k views

How to correct interest rate for inflation?

I'm looking for someone to double check my math and who can tell me if I have correctly accounted for inflation. Say you hypothetically invest $100 with 7% rate and 2% inflation. You would end up ...
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1answer
217 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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1answer
278 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 ...
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1answer
355 views

How to determine a reasonable rate of inflation assumption for long-term care?

Would it be reasonable to project that the cost of long-term care and long-term care insurance in the US will go up as fast as health-care inflation, or at some rate closer to the general rate of ...