2% Plan to Impoverish You (which is really 9.7%)

Anyone with basic Excel skills can calculate the cumulative impoverishment caused by central banks' "modest" 2% annual inflation. Here is my worksheet:

Column 1: year
Column 2: index starting with 100
Column 3: annual inflation sum (2% of previous year's total index)
Column 4: cumulative total index







 

In one decade of 3% annual inflation, the purchasing power of $100 declines to $73, and after 20 years of central bank inflation, it drops almost in half to $54. The central banks' inflation is a steady transfer of wealth from households to the banking sector and those holding ballooning assets like stocks. This is why central banks cling to their target so vociferously: their reason to exist is to enrich the banking sector at the expense of the rest of us.

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