PROOF
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Posted by eric (167.88.192.30) on November 25, 2002 at 06:57:59:

KEN:
This is from the SIA Investor site, one of hundreds that have info on this matter:
http://www.siainvestor.com/categories/investingessentials/inflation/inflation_011.htm

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“You can think of inflation in two ways:
(1)Persistent increases in the costs of goods and services
(2)Persistent decreases in the buying power of the dollar
Either way, inflation is the opposite of stable prices, and over time can erode the purchasing power of your money. For example, you can buy somewhat less with a dollar today than you could have bought five years ago, and significantly less than you could have bought fifty years ago. So if you have the same amount of income each year, your purchasing power gradually shrinks.

How to calculate the purchasing power of money:

The consumer price index (CPI) is the most widely used measure of inflation. The index is figured each month by computing the percentage of price changes for 80,000 different goods and services. The CPI is used as a benchmark for determining adjustments to new labor contracts, Social Security payments, and tax brackets. Some economists, however, believe that the CPI regularly overstates inflation by 1.5%.”

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It is this CPI that I used to calculate inflation, therefore calculating the time value of money, therefore calculating 127k in 1990 = 176k in 2002. As you can see, If Dr. Leonard was an Economist, he would know this.

THERE IS YOUR PROOF.
IF YOU CANT UNDERSTAND OR ACCEPT THIS, YOU ARE CLUELESS.


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