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<p>[QUOTE=&quot;sand, post: 8210847, member: 118540&quot;]When one discusses inflation, usually one is talking about, the rate of inflation per year.</p><p>For example, the most recent inflation number, the Consumer Price Index (CPI), for the USA, in January, was 7.5% per year.</p><p><a href="https://news.yahoo.com/consumer-price-index-cpi-inflation-january-2022-210344769.html" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://news.yahoo.com/consumer-price-index-cpi-inflation-january-2022-210344769.html" rel="nofollow">https://news.yahoo.com/consumer-price-index-cpi-inflation-january-2022-210344769.html</a></p><p>This means that, if the rate of inflation, which was measured in January, continues for 1 year, then the prices of things, such as food, gasoline, and housing, will have increased by 7.5% by the end of 2022.</p><p>If the rate of inflation remains 7.5% per year, for the next 10 years, then the prices of things, will have increased by 206% by the end of 2031. In other words, the prices of things, will have doubled, by the end of 2031.</p><p>This seems counter-intuitive. Naively, one would think, that prices would have increased by 75% after 10 years, which is 7.5% times 10.</p><p>But, it&#039;s the &quot;miracle of compounded interest&quot;. You have to multiply by 1.075, and do it 10 times.</p><p>Venezuela, on the other hand, in 2021, had an inflation rate of 686% per year.</p><p><a href="https://www.reuters.com/world/americas/venezuelas-inflation-hit-6864-2021-central-bank-2022-01-08/" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://www.reuters.com/world/americas/venezuelas-inflation-hit-6864-2021-central-bank-2022-01-08/" rel="nofollow">https://www.reuters.com/world/americas/venezuelas-inflation-hit-6864-2021-central-bank-2022-01-08/</a></p><p>If the inflation rate were to continue to be 686% per year, then after 10 years, the prices of things, will have increased by 23080284457668872281971966976%, by the miracle of compounded interest.</p><p>However, Venezuela&#039;s rate of inflation has changed drastically, for various years. The following graph, shows Venezuela&#039;s rate of inflation, for every year, since 1985. In 2018, the rate of inflation per year, in Venezuela, was 65374%.</p><p>[ATTACH=full]1440507[/ATTACH]</p><p>And here is a link to a table, with similar data, for Venezuela. You have to scroll down, to see the table. The inflation rate per year, is the 3rd column from the right.</p><p><a href="https://en.wikipedia.org/wiki/Economy_of_Venezuela#Statistics" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://en.wikipedia.org/wiki/Economy_of_Venezuela#Statistics" rel="nofollow">https://en.wikipedia.org/wiki/Economy_of_Venezuela#Statistics</a></p><p>EDIT : Note that, the inflation rate, in the above table for 2021 (5500%), is different, than in the Reuters article for 2021 (686%). I&#039;m guessing, that it&#039;s because, the inflation was measured in a different way. Perhaps the prices of certain items, such as health care or gasoline or college, were included in one measurement, but not in the other measurement. Or, perhaps different items were weighted differently.[/QUOTE]</p><p><br /></p>

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