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birb_cromble  4d ago (text post)   746 thread views

Qeekly Finance Thread - 2026-09-26

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We've had double-digit inflation annualized over the last 5 years. The 2008 crash kept inflation low from 2010-2020, but 2000-2010 was 15% annual inflation and we've been 12% since 2020.

We should expect double digit inflation or very close to it over a 5 year period, as 2% per year works to 10.4% in total over 5 years. I'm not sure what you mean by "annualized", but typically that would mean "converted such that it communicates the rate of a given period's inflation occurring over a 12-month span". We have not even been close to double digit annual inflation pretty much ever - even 2022 was only 7%. But, yes, the Fed has overshot its target significantly post-pandemic and continues to miss in 2026.

what you mean by "annualized"

The rate at which, when compounded annually, matches the inflation over time. So, doubling in 3 years means a 26% annualized rate, because 1.263 = 2. More generally, the rate r raised to the # of periods n equals the ratio of ending level to starting level.

1+rn= end / start

In this way the annualized rate of a single year, n=1, is one less the year over year ratio.

And if you want to cherrypick starting years, say 1979, then you'd find the spot price of gold was $230 Jan/79 and was $4335 Jan/26, you have:

(1+r)(2026-1979) = 4335/230

(1+r)47 = 867/46

47*ln(1+r) = ln(847/46)

r = e ( 18.8 / 47 ) - 1 = .064

6.4% annual rate of growth.

Again, cherry picked, and already assuming that gold is the yardstick by which to measure the currency, and not just another commodity. But it's been maybe 7% inflation annually since 1971.

Gold is definitely not a good choice for measuring inflation.

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