3 ms·
> it loses at least 2% of its value by intention How do you get "at least"? The target used to be "below, but close to 2%", but has been increased to around 2%
by FabHK 4y ago
> it loses at least 2% of its value by intention
How do you get "at least"? The target used to be "below, but close to 2%", but has been increased to around 2% (symmetrically). It has been less than 2.5% over the last 20 years (https://fred.stlouisfed.org/series/CPIAUCSL https://fred.stlouisfed.org/series/CPIAUCSL) including the recent spike, and has been 2.02% from Jan 2001 to Jan 2021, which I'd call precisely on target.
Needless to say, if you parked your extra money in the stock or housing markets, you handily beat inflation. And if you don't have money to invest in the markets, then you don't care about inflation anyway (but rather real wage growth).
- jokethrowaway 4y agoThe indexes used to measure inflation are picked to stay under 2%. I kept track of my groceries and rent for 10 years up to last year and my perceived inflation was way higher than 2% (even allowing some margin of error). This year is being completely insane but it's hard for me to compare as I moved. Wages don't grow with inflation (the sad 1% yearly raise) unless you job hop. Stocks don't give you always the best window to withdraw your annualised 7-8% profit. If you'll need to buy a house or if you'll go to pension you may end up withdrawing at bad times. Houses have been mostly going up. Good to beat inflation, terrible for youngsters who need a place to live without paying someone else's mortgage.