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<p>[QUOTE=&quot;fatima, post: 1356699, member: 22143&quot;]In fact geometric expansion is exactly what happens but inflation is always given as a percent of the current system, not as a flat number. This tends to hide the effects of the increase.&nbsp; However the math is extremely simple as it follows this rule.&nbsp; <i>Increase a system at a linear percentage rate and the result is exponential growth.</i>&nbsp; </p><p><br /></p><p>This can be demonstrated by this pretty simple example which I did on a spread sheet.&nbsp;&nbsp; Assume that you start with a price of $1000 and you inflate it by 10%/year.&nbsp; I picked these numbers to make the example clear but the math is always the same.&nbsp;&nbsp; First note the data.&nbsp;&nbsp; First year you start with $1000, 10% inflation means cost goes up $100, year 2 you start with $1100.&nbsp; Rince &amp; repeat for 100 years.&nbsp; </p><p><br /></p><p>Here is the first 25 years.&nbsp; It looks harmless enough even at 10%</p><p><br /></p><p>[ATTACH]157933.vB[/ATTACH]</p><p><br /></p><p>However it&#039;s a sheep in wolves clothing.&nbsp; Each year doesn&#039;t look that bad, until you hit the puck end of the hockey stick graph as a graph of the entire 100 years shows. There is your geometric expansion caused by simple inflation.&nbsp;&nbsp; In just a few more years, the line moves to infinity and the system collapses.&nbsp;&nbsp; The effect is the same no matter the inflation rate or the initial principle.&nbsp;&nbsp; Keep in mind, this is just for a fixed amount of money.&nbsp; Imagine the effects of creating new money and adding it to this system.&nbsp; </p><p><br /></p><p>Geometric Expansion</p><p>[ATTACH]157934.vB[/ATTACH]</p><p><br /></p><p>The math can&#039;t be denied.&nbsp;&nbsp; The system looks stable for quite a while then all of a sudden there is an explosive increase that comes without warning.&nbsp; Since we are talking about generational time spans, it goes by unnoticed by the current generation until you hit the puck end of the hockey stick and the generation unfortunate enough to be living during that time is shocked beyond belief.&nbsp; Governments fall, wars start, etc.&nbsp; It&#039;s all happened before.&nbsp; This is why no fiat based system has managed to last more than 50-70 years in human history.&nbsp; Most collapse sooner than that.[/QUOTE]</p><p><br /></p>

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