Pericles,let's go back to basic arithmetic.All things being equal,to halve the value of your money,you double the money supply.Correct? To diminish the value of $1.00 to 4 cents you have to increase the money supply by 25 times or 2500%, correct? Over 96 yrs{ divide 2500% by 96] this represents and annual increase in money supply of 26%.This means that for every $1.00 in a given yr the banks are creating an additional 26 cents,which depreciates the value of our currency.

Using the average yearly inflation figure of 3% does not reflect the reality since the inflation is compounded.Multiply 3% by 96 and we get 288% The $1.00 did not depreciate by 3 times,it depreciated 25 times or 2500% it's orininal value.Because of the compounding effect of inflation,there is expodential depreciation of currency
.

To achieve this compounding effect banks are increasing the money supply by 26% pa.Is there some other way that I can explain it so you can understand?

All your blustering and carrying on,will not deny that reality.Just admit that you are wrong or prove me wrong using the same logic.

You still haven't grasped it Arjay.

It is so simple, I feel you might just be pretending not to know, for some reason that amuses you.

>>Over 96 yrs{ divide 2500% by 96] this represents and annual increase in money supply of 26%<<

You are focussing on a volume average, not percentages per annum.

If you have a dollar in 1900, and $2,500 in 2009, the average increase per year is $22.93. That does not mean that in 1901 you have $23.93. Just that if you had a pile of "extra" dollars and divided them equally between the number of years, you'd have an extra $22.93 each year.

While it is a statistic, it is not a measure we use.

If you were to do what most people do, and work on a year-on-year basis, the inflation number is 3%.

>>the average yearly inflation figure of 3% does not reflect the reality since the inflation is compounded<<

Wrong, it does reflect reality. Each year differs from the previous year by 3%

>>Multiply 3% by 96 and we get 288% <<

Multiplying a percentage in this fashion is meaningless, because a percentage doesn't mean anything without another number to work with. So it's always a percentage of "something".

Your 2500% is a percentage of the position in 1900.

My 3% is the percentage change from the immediately preceding year, so multiplying it by 96 loses its relevance.

>>To achieve this compounding effect banks are increasing the money supply by 26% pa.Is there some other way that I can explain it so you can understand?<<

I doubt whether you can, since you are so clearly wrong.

To demonstrate this, take any number you like, from 1900 to today, and increase it by 26%. You will find that your new number has no significance whatsoever, in the context of inflation.

>>All your blustering and carrying on,will not deny that reality.Just admit that you are wrong or prove me wrong using the same logic.<<

Using your version of logic is what led you down this blind alley in the first place.