Their rate of inflation iis decreasing but they still experience inflation rather than deflation. INFLATION IS COMPOUNDING even if the rate of increase of inflation is slightly lower there is still a lot of inflation.
If you owe $100 and inflation is stuck at 200% per year after one year you’ll owe $300, after two years $900, three years $2,700.
Now if you owe $100 and inflation starts at 200% per year then drops to 190% for year 2, and then falls again to 180% for year three you’re looking at this: year 1 $300, year 2 $870, year 3 $2,436.
It’s better to owe someone $2,436 than it is to owe them $2,700. But owing someone $2,436 sucks a lot more than owing them $100.
I don’t know how this couldn’t be clear to anyone who understands the concept of inflation.
Their rate of inflation iis decreasing but they still experience inflation rather than deflation. INFLATION IS COMPOUNDING even if the rate of increase of inflation is slightly lower there is still a lot of inflation.
If you owe $100 and inflation is stuck at 200% per year after one year you’ll owe $300, after two years $900, three years $2,700.
Now if you owe $100 and inflation starts at 200% per year then drops to 190% for year 2, and then falls again to 180% for year three you’re looking at this: year 1 $300, year 2 $870, year 3 $2,436.
It’s better to owe someone $2,436 than it is to owe them $2,700. But owing someone $2,436 sucks a lot more than owing them $100.
I don’t know how this couldn’t be clear to anyone who understands the concept of inflation.
https://youtu.be/T8-85cZRI9o
https://youtu.be/BHw4NStQsT8